1 CGHC010307242026 2026:CGHC:37504-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WA No. 786 of 2026 Vikas Tank S/o Late Dilip Bhai Tank Aged About 46 Years Proprietor M/s Shriram Wires, R/o Beside Amit Sales, T.V. Showroom, Street No. 1, Near Chandak Bada, Fafadih, Raipur Chhattisgarh ... Appellant(s) versus 1 - Executive Engineer City Division (North), Chhattisgarh State Power Distribution Company Limited City Division Office, Gudhiyari, Raipur Chhattisgarh 2 - Electricity Ombudsman Chhattisgarh Electricity Regulatory Commission Premises, Irrigation Colony, Shanti Nagar, Raipur Chhattisgarh ... Respondent(s) For Appellant(s) : Mr. Manoj Paranjpe, Sr. Adv. Along with Ms. Apoorva Ghore, Advocate For Respondent(s) : Mr. Varun Sharma, Advocate Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Ravindra Kumar Agrawal , Judge Judgment on Board Per Ramesh Sinha, Chief Justice 21.08.2026 1. Heard Mr. Manoj Paranjpe, learned Senior Advocate along with MANPREET KAUR Digitally signed by MANPREET KAUR Date: 2026.08.22 12:28:13 +0530 2 Ms. Apoorva Ghore, learned counsel for appellant. Also heard Mr. Varun Sharma, learned counsel for the respondents. 2. By way of this writ appeal, appellant has prayed for following relief(s):- “It is, therefore, most humbly prayed that this Hon'ble Court may kindly be pleased to allow the instant appeal and set aside the judgment dated 03.07.2026 passed in W.P.(C) No. 2291/2020 by the Learned Single Judge of this Hon'ble Court (Annexure A/1). The writ appeal filed by the Appellant may kindly be allowed, in the interest of justice.” 3. The present intra Court appeal has been filed against the order dated 03.07.2026 passed by the learned Single Judge in WPC No.2291/2020 (Executive Engineer City Division (North) vs. Electricity Ombudsman Chhattisgarh Electiricity Regulatory Commission Premises and Another), whereby the writ petition filed by the writ petitioner/respondent No.1 herein was allowed by the learned Single Judge. 4. Brief facts of the case are that the appellant, proprietor of M/s Shriram Wires and a consumer of the Chhattisgarh State Power Distribution Company Limited (CSPDCL) having Connection No. 1002108243 with sanctioned load of 90 HP, challenges the judgment dated 03.07.2026 passed in W.P.(C) No. 2291/2020, whereby the learned Single Judge allowed the writ petition preferred by CSPDCL and set aside the order dated 18.02.2020 3 passed by the Electricity Ombudsman, affirming the order dated 09.10.2019 of the Electricity Consumer Grievance Redressal Forum, Raipur. A 200/5 Ampere Current Transformer was installed at the appellant’s premises on 16.06.2008 and the meter was subsequently replaced on 13.04.2011. During a surprise inspection conducted on 03.04.2017, CSPDCL alleged that the electricity consumption had been billed by applying an incorrect Multiplying Factor of 1 instead of 2, resulting in under-recording of consumption, and consequently raised a supplementary demand of ₹26,88,265/-. After prolonged proceedings before the authorities, the Grievance Redressal Forum and the Electricity Ombudsman, the Ombudsman, vide order dated 18.02.2020, partly allowed the appellant’s claim by holding that, in view of Section 56(2) of the Electricity Act, 2003, recovery of the supplementary demand could not extend beyond two years preceding the date of the supplementary bill. Aggrieved, CSPDCL approached this Court by W.P.(C) No. 2291/2020, which was allowed by the learned Single Judge by relying upon the decisions of the Supreme Court in Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Limited v. Rahamatullah Khan @ Rahamjulla, (2020) 4 SCC 650 and Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Limited, (2021) 20 SCC 200, holding that Section 56(2) of the Electricity Act, 2003 has no application to supplementary demands. The appellant contends that the present case is distinguishable from the aforesaid decisions as the alleged 4 discrepancy in the Multiplying Factor occurred on account of the respondent’s failure to correctly apply the applicable factor and to undertake periodic inspection and verification of the metering equipment as required under the Chhattisgarh Electricity Supply Code, 2011, and that the appellant, having acted upon the regular bills raised by the respondent for several years, ought not to be saddled with the entire supplementary demand arising from the respondent’s own lapse. Hence, the present appeal has been preferred challenging the judgment dated 03.07.2026. 5. Learned counsel for the appellant would submit that the learned Single Judge failed to appreciate the statutory obligation cast upon the respondent-Distribution Licensee under Regulation 8.18 of the Chhattisgarh Electricity Supply Code, 2011, which mandates periodical testing of meters and metering equipment and specifically requires HT and EHT meters to be tested once every year. It is contended that although the metering equipment was installed in 2008 and the meter was replaced in 2011, the respondent did not conduct any periodical inspection or testing for nearly nine years and detected the alleged discrepancy in the Multiplying Factor only during the inspection dated 03.04.2017. Learned counsel submits that the Multiplying Factor was determined, recorded and applied by the respondent itself and the entire metering, testing and billing system remained within its exclusive control. The inspection report itself recorded that the meter and display were functioning properly and contained no 5 allegation of tampering, broken seals, dishonest abstraction, unauthorized interference or any fraudulent act on the part of the appellant. It is therefore submitted that the respondent cannot retrospectively assume that the alleged discrepancy existed continuously from 2008 till 2017, particularly in the absence of any meter-testing report, calibration report, programming record, laboratory analysis or other technical evidence establishing the same. 6. Learned counsel would further submit that the present case is materially distinguishable from Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Limited v. Rahamatullah Khan @ Rahamjulla, (2020) 4 SCC 650 and Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Limited, (2021) 20 SCC 200, relied upon by the learned Single Judge. According to him, the present case does not involve a mere bona fide billing mistake but a prolonged failure of the respondent to discharge its statutory duty of inspection and testing. A mistake and negligence are distinct concepts, and the respondent’s failure to undertake mandatory annual testing for nine consecutive years amounts to statutory negligence and cannot be permitted to operate to the prejudice of the consumer. Reliance is placed upon M/s Bajaj Trading Company v. Union of India, wherein, with reference to Rajkot Municipal Corporation v. Manjulben Jayantilal Nakum, (1997) 9 SCC 552, the Supreme Court explained negligence as including careless conduct or omission involving breach of a recognised 6 duty of care. It is thus argued that the respondent cannot take advantage of its own omission and recover from the appellant the financial consequences arising from its failure to detect the alleged discrepancy within the prescribed period. Relevant paras of the M/s Bajaj Trading Company (supra) is reproduced hereinbelow: “12.5 In Rajkot Municipal Corpn. v. Manjulben Jayantilal Nakum, the concept of negligence was explained in detail, as follows: "14. Negligence has been viewed in three ways. Firstly, involving a careless state of mind; secondly, a careless conduct; and thirdly, a tort in itself. Every case giving rise to tortious liability, consists of injury and damage done due to negligence. Injury and damage may be found due to breach of contract or tort. We are concerned in this case with the injury and damage in tort. Therefore, it is necessary to dwell, in depth, on strict liability, absolute liability or special liability. In the present case, the omission alleged is to take care of periodical check-up of the condition of the trees. The degree of liability depends upon the degree of mental element. The elements of tort of negligence, therefore, consist in (a) duty of care; (b) duty owed to the plaintiff; and (c) it has been carelessly breached. Negligence does not give rise to liability unless the law fastens the duty of care in given circumstances. Duty is an obligation recognised by law to avoid conduct brought with unreasonable risk of damage to another. The 7 question whether duty consists in a particular situation involves determination as a question of law. 15. Negligence would include both acts and omissions involving unreasonable risk of having done harm to another. The breach of duty must cause damage. How much of the damage to be compensated by the defendant should be attributed to his wilful conduct and how much to his wilful negligence or careless conduct or remissness in performance of duty, are all relevant facts to be considered in a given act or omission in adjudging duty of care. The element of carelessness or the breach of duty and whether that duty is towards the plaintiff or the class of persons to which the plaintiff belongs are important components in tort of negligence. Negligence would, therefore, mean careless conduct in commission or omission of an act, whereby another to whom the plaintiff owed duty of care has suffered damage. The duty of care is crucial in understanding the nature and scope of tort of negligence. The question in each case is whether the defendant has been negligent in the performance of duty or omission thereof. Determination of duty of care also involves action which requires detailedstatutory examination..." 7. Learned counsel would also submit that the appellant had regularly paid the electricity bills raised by the respondent and had structured its electricity consumption, production costs and pricing of finished goods on the basis thereof. Had the respondent 8 performed its statutory duty of periodic inspection, the alleged discrepancy would have been detected at the earliest and the appellant could have regulated its consumption and financial affairs accordingly. It is contended that even if Section 56(2) of the Electricity Act, 2003 is held inapplicable to supplementary demands, the respondent’s claim cannot escape the ordinary law of limitation and, in the absence of fraud or any mistake incapable of discovery despite due diligence, Section 17 of the Limitation Act, 1963 cannot be invoked to save a claim arising after nearly nine years. The alleged discrepancy was neither concealed by the appellant nor incapable of detection by the respondent, whose statutory duty was precisely to inspect and test the metering equipment periodically. Learned counsel therefore submits that the respondent cannot be permitted to take advantage of its own negligence, particularly when the appellant was not found to have tampered with the meter or adopted any illegal means of consumption, and that the impugned judgment, having failed to consider these material aspects and having permitted recovery of the entire retrospective demand, deserves to be set aside and the order passed by the Electricity Ombudsman restored 8. On the other hand, learned counsel appearing for the respondent- Distribution Licensee would support the impugned judgment and submit that the learned Single Judge has rightly allowed W.P.(C) No. 2291/2020 and set aside the order dated 18.02.2020 passed by the Electricity Ombudsman. It is contended that during the 9 inspection conducted on 03.04.2017, it was found that the appellant’s electricity consumption had been billed by applying an incorrect Multiplying Factor of 1 instead of 2, resulting in under- recording of the actual consumption. Consequently, the supplementary demand was rightly raised towards the differential units which had not been billed earlier. Learned counsel would submit that the liability of the appellant arises from the actual electricity consumed and that mere payment of the bills raised earlier cannot absolve the consumer from payment of the electricity charges actually payable. 9. Learned counsel would further submit that the judgments of the Supreme Court in Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Limited (supra) and Prem Cottex (supra), squarely govern the controversy and make it clear that Section 56(2) of the Electricity Act, 2003 does not extinguish the licensee’s right to recover charges which had not been correctly billed earlier and that the provision primarily operates in the context of disconnection of supply. According to learned counsel, the supplementary demand represents charges for electricity actually consumed by the appellant but not billed due to application of an incorrect Multiplying Factor and, therefore, cannot be treated as a demand barred merely on account of the passage of time. It is also submitted that the appellant cannot derive any benefit from the alleged failure to detect the discrepancy earlier, as the subsequent inspection brought the correct billing position to light 10 and the respondent is legally entitled to recover the amount corresponding to the actual consumption. 10. Learned counsel would lastly submit that there is no material to establish any mala fide, fraud or deliberate inaction on the part of the respondent and that the appellant cannot claim immunity from payment of legitimate electricity dues merely because the discrepancy was detected subsequently. The provisions of the Chhattisgarh Electricity Supply Code relating to periodic testing of meters do not extinguish the respondent’s substantive right to recover charges for electricity actually consumed, nor do they confer upon the consumer a right to receive electricity at an erroneously calculated rate. It is therefore contended that the learned Single Judge, after considering the applicable statutory provisions and the binding judgments of the Supreme Court, rightly interfered with the order of the Electricity Ombudsman, and the present appeal, being devoid of merit, deserves to be dismissed. 11. Learned counsel for the appellant also placed reliance upon the judgment passed by the Hon’ble Supreme Court in the matter of Prem Cottex Vs. Uttar Haryana Bijli Vitran Nigam Limited and Others, reported in (2021) 20 SCC 200, wherein the scope of Section 56(2) of the Electricity Act, 2003 was considered in detail. The Hon’ble Supreme Court, while referring to its earlier decision in Rahamatullah Khan, observed that although the liability to pay 11 electricity charges arises upon consumption, the obligation to pay arises when the bill is raised by the licensee and, therefore, the charges become “first due” only upon issuance of the bill. The Court further clarified that Section 56(2) operates not merely as a restriction upon disconnection of electricity supply but also expressly bars recovery of a sum due from a consumer after expiry of two years from the date on which such sum first became due. It was, however, observed that the licensee may raise an additional or supplementary demand after expiry of the said period where the case falls within the recognised exception of a mistake or bona fide error. Relying upon the aforesaid principle, learned counsel for the appellant submits that the respondent cannot seek to recover the supplementary demand for the entire period of nearly nine years merely by describing the incorrect application of the Multiplying Factor as a mistake, particularly when the alleged error remained undetected despite the statutory obligation of the licensee to periodically inspect and test the metering equipment. According to learned counsel, the benefit of the exception recognised in Prem Cottex is available only where the supplementary demand genuinely arises from a mistake or bona fide error and cannot be invoked to legitimise recovery resulting from the respondent’s own prolonged failure to discharge its statutory duties. Relevant paras of the judgment are quoted hereinbelow: “11. On the first two issues, this Court held that though the 12 liability to pay arises on the consumption of electricity, the obligation to pay would arise only when the bill is raised by the licensee and that, therefore, electricity charges would become "first due" only after the bill is issued, even though the liability would have arisen on consumption. On the third issue, this Court held in Rahamatullah Khan³, that "the period of limitation of two years would commence from the date on which the electricity charges became first due under Section 56(2)". This Court also held that Section 56(2) does not preclude the licensee from raising an additional or supplementary demand after the expiry of the period of limitation in the case of a mistake or bona fide error. To come to such a conclusion, this Court also referred to Section 17(1)(c) of the Limitation Act, 1963 and the decision of this Court in Mahabir Kishore v. State of M.P.4 12. Despite holding that electricity charges would become first due only after the bill is issued to the consumer (para 6.9 of the SCC Report of Rahamatulla Khan³) and despite holding that Section 56(2) does not preclude the licensee from raising an additional or supplementary demand after the expiry of the period of limitation prescribed therein in the case of a mistake or bona fide error (para 9.1 of the SCC Report of Rahamatulla Khan³), this Court came to the conclusion that what is barred under Section 56(2) is only the disconnection of supply of electricity. In other words, it was held by this Court in the penultimate paragraph that the licensee may take recourse to any remedy available in law for the recovery of the additional demand, but is barred from taking recourse to disconnection of supply under Section 56(2). 13. But a careful reading of Section 56(2) would show that 13 the bar contained therein is not merely with respect to disconnection of supply but also with respect to recovery. If sub-section (2) of Section 56 is dissected into two parts it will read as follows: (i) 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; and (ii) the licensee shall not cut off the supply of electricity. Therefore, the bar actually operates on two distinct rights of the licensee, namely, (i) the right to recover; and (ii) the right to disconnect. The bar with reference to the enforcement of the right to disconnect, is actually an exception to the law of limitation. Under the law of limitation, what is extinguished is the remedy and not the right. To be precise, what is extinguished by the law of limitation, is the remedy through a court of law and not a remedy available, if any, dehors through a court of law. However, Section 56(2) bars not merely the normal remedy of recovery but also bars the remedy of disconnection. This is why we think that the second part of Section 56(2) is an exception to the law of limitation.” 12. We have heard learned counsel for the parties and perused the impugned judgment passed by the learned Single Judge and the pleadings and documents placed on record. 13. From perusal of the impugned judgment, it transpires that the learned Single Judge allowed the writ petition primarily on the ground that the finding recorded by the Electricity Consumer Grievance Redressal Forum regarding irregularity in the use of 14 electricity by the appellant had not been challenged before the Ombudsman and, therefore, remained undisturbed. The learned Single Judge further held, relying upon Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Limited v. Rahamatullah Khan @ Rahamjulla and Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Limited, that Section 56(2) of the Electricity Act, 2003 had no application to the supplementary demand and that the respondent was entitled to recover the differential amount for the entire period from installation of the meter. The contention of the appellant that the respondent had failed to conduct periodic inspection of the metering equipment was consequently not accepted, and the order of the Electricity Ombudsman restricting recovery to a period of two years was set aside, while the order of the Forum was affirmed. 14. In our considered opinion, the learned Single Judge fell into error in treating the finding regarding alleged irregularity in the meter as conclusive of the appellant’s liability for the entire period from installation of the meter. The material question was not merely whether the respondent could raise a supplementary demand upon detection of an alleged discrepancy, but whether the respondent could retrospectively recover the differential amount for nearly nine years when the alleged discrepancy was attributable to the Multiplying Factor applied by the licensee itself and when the licensee had failed to discharge its statutory obligation of periodic testing of the metering equipment. The 15 Chhattisgarh State Electricity Supply Code, 2011 specifically casts responsibility upon the licensee to satisfy itself regarding the accuracy of the meter before installation and further mandates periodical testing. In particular, Clause 8.18(c) requires HT and EHT meters along with metering equipment to be tested once every year. (India Code) Thus, the statutory scheme itself recognises that the accuracy of the metering arrangement is a matter requiring periodic verification by the Distribution Licensee. 15. In the present case, the respondent has not demonstrated that the prescribed annual testing of the meter and metering equipment was undertaken during the period in question. More importantly, the inspection dated 03.04.2017 did not record any finding of meter tampering, broken seals, dishonest abstraction of electricity or any physical interference with the metering apparatus by the appellant. The inspection report, as placed before us, recorded the meter and its display to be functioning properly. The alleged discrepancy was essentially in the application of the Multiplying Factor. Such factor forms part of the billing and metering arrangement maintained and controlled by the licensee. In these circumstances, the mere fact that a subsequent inspection disclosed an incorrect Multiplying Factor could not, by itself, establish that the same factor had remained incorrectly applied throughout the entire period from 2008 till 2017. There ought to have been cogent material demonstrating that the alleged discrepancy existed continuously during the entire period for 16 which the supplementary demand was raised. In the absence of meter-testing records, calibration records, programming details, inspection reports or other contemporaneous material establishing such continuity, the retrospective assessment for the entire period cannot be sustained merely on the basis of an assumption. 16. We are also unable to accept the reasoning of the learned Single Judge that, since the appellant had not challenged the finding of the Forum regarding irregularity in the use of electricity, the entire supplementary demand necessarily stood established. The appellant’s challenge is not confined to the existence of the discrepancy noticed on 03.04.2017 rather, the principal grievance is against the retrospective fastening of liability for the entire preceding period on account of the respondent’s own failure to undertake the mandatory periodic testing. A finding that an irregularity existed on the date of inspection cannot automatically establish that the same irregularity existed continuously for nearly nine years. The two questions are materially distinct and required separate consideration. The learned Single Judge, in our view, did not sufficiently examine this distinction and consequently proceeded on an assumption which is not borne out from the inspection material. 17. The respondent, being the Distribution Licensee, was in control of the metering arrangement, the application of the Multiplying Factor and the billing process. The appellant had no authority to 17 determine what Multiplying Factor was to be incorporated in the billing system. Once the Supply Code imposed a specific obligation upon the licensee to periodically test the metering equipment, failure to undertake such testing for years cannot be completely disregarded while determining the extent of retrospective liability. The respondent cannot be permitted to rely upon its own failure to perform a statutory obligation as a basis for shifting the entire financial consequence upon the consumer. The Supreme Court, while explaining the concept of negligence in M/s Bajaj Trading Company v. Union of India, 2026 INSC 711, has reiterated that negligence includes failure to take proper care and omission involving breach of a recognised duty of care, with reference to the principles laid down in Rajkot Municipal Corporation v. Manjulben Jayantilal Nakum, (1997) 9 SCC 552. Though the said decision arose in a different statutory context, the principle that a statutory duty cannot be disregarded while examining the consequences flowing from an omission is of relevance to the present controversy. 18. We further find that the reliance placed by the learned Single Judge upon Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Limited v. Rahamatullah Khan @ Rahamjulla, (2020) 4 SCC 650 and Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Limited, (2021) 20 SCC 200, requires reconsideration in the factual setting of the present case. Those decisions cannot be understood as laying down that in every case where a supplementary bill is 18 raised on account of an alleged billing or metering error, the licensee is automatically entitled to recover the entire differential amount for an indefinite retrospective period irrespective of its own statutory obligations and the evidentiary basis for the period of assessment. The question whether the alleged discrepancy actually continued throughout the period for which the demand is raised is a factual question which must be established on the basis of reliable material. In the present case, the respondent has failed to establish such continuity and has also failed to explain its non-compliance with the mandatory periodic testing requirement. 19. Learned counsel for the appellant has also placed reliance upon the judgment of the Hon’ble Supreme Court in Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Limited and Others, (2021) 20 SCC 200, wherein, while considering the scope of Section 56(2) of the Electricity Act, 2003, the Hon’ble Supreme Court held that the provision contains a bar not merely against disconnection of electricity supply but also against recovery of a sum due from a consumer after expiry of two years from the date when such sum first became due. The Hon’ble Supreme Court, while referring to its earlier decision in Rahamatullah Khan, also recognised that an additional or supplementary demand may be raised after expiry of the prescribed period in a case involving a genuine mistake or bona fide error. However, in our considered opinion, the aforesaid exception cannot be construed as conferring an unrestricted right upon the licensee to recover every belated demand merely by 19 describing the same as a mistake or bona fide error. In the present case, the alleged discrepancy in the Multiplying Factor was admittedly within the metering and billing system controlled by the respondent-licensee, and there is no material to establish that the appellant had caused or contributed to such discrepancy. More importantly, the respondent has failed to establish that the alleged incorrect Multiplying Factor continued to operate throughout the entire period of nearly nine years for which the supplementary demand has been raised. The respondent’s failure to undertake the mandatory periodic testing of the metering equipment assumes significance in this regard. Therefore, the present case cannot mechanically be brought within the exception of “mistake or bona fide error” recognised in Prem Cottex, particularly when the alleged error remained undetected for years on account of the licensee’s own failure to discharge its statutory obligation. The said judgment, therefore, does not support the unrestricted retrospective recovery permitted by the learned Single Judge rather, the principle laid down therein requires the Court to examine whether the case genuinely falls within the recognised exception before permitting recovery beyond the statutory period. 20. It is equally important that the appellant was not found to have committed any act of tampering or dishonest abstraction. The respondent’s case, therefore, cannot be equated with a case where a consumer deliberately interferes with the metering 20 system and thereby suppresses actual consumption. Where the alleged short billing flows from the incorrect Multiplying Factor maintained or applied by the licensee itself, and there is no material showing that the consumer caused or manipulated such error, the consequences of the licensee’s prolonged failure to detect the discrepancy cannot mechanically be imposed upon the consumer for the entire preceding period. The appellant had been receiving regular electricity bills and making payment on the basis thereof, and there is nothing on record to demonstrate that the appellant had any reason to know that the Multiplying Factor applied by the licensee was incorrect. 21. In view of the aforesaid discussion, we are of the considered opinion that the learned Single Judge erred in setting aside the order of the Electricity Ombudsman merely by holding that Section 56(2) of the Electricity Act, 2003 had no application to the supplementary demand. Even assuming that the said provision does not operate as a limitation upon the substantive right to recover charges for electricity actually consumed, the respondent must still establish, by cogent material, the period for which the alleged differential consumption remained unpaid and cannot claim recovery for a period merely on the basis of a retrospective assumption. The order of the Ombudsman, restricting the recovery in the facts and circumstances of the case, therefore, calls for interference. 21 22. Accordingly, the appeal is allowed. The judgment and order dated 03.07.2026 passed by the learned Single Judge in W.P.(C) No. 2291/2020 is set aside. Consequently, the order dated 18.02.2020 passed by the Electricity Ombudsman is restored. Any consequential demand raised by the respondent shall stand governed by the said order. No order as to costs. Sd/- Sd/- (Ravindra Kumar Agrawal) (Ramesh Sinha) Judge Chief Justice Manpreet