Sanchayita Lahkar

The High Court of Calcutta Division Bench of Justice Rajarshi Bharadwaj and Justice Uday Kumar dismissed the appeal by a state electricity distribution licensee and held that it could not recover a supplemental electricity bill of about Rs. 55.8 lakh from an industrial consumer. The dispute arose from a supplemental demand raised after an inspection that alleged a “polarity reversal” in the transformer, following which the licensee sought to regenerate bills on an average basis for the alleged period of under-recording. The Court found that the demand rested on speculative average billing without satisfactory proof of the defect’s rectification or other contemporaneous evidentiary support. It declared the principal supplemental demand void, directed waiver of the entire late payment surcharge and related interest, ordered adjustment of the amount deposited under protest against future bills, and quashed disconnection notices.

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In November 2019, the licensee refunded the payments and issued revised bills totalling Rs. 55,80,653/-, alleging that a technical inspection dated November 29, 2019 detected a polarity reversal at the Potential Transformer (PT), which allegedly led to under-recording of consumption for 140 days. Invoking Regulation 3.6.1 of the WBERC Regulations, the licensee regenerated bills on an average basis.

The consumer challenged the demand before the Electricity Ombudsman, who recorded that the Forum was “not satisfied” with the evidence regarding rectification of the defect but nevertheless affirmed the demand. The dispute before the Court concerned the applicability of Regulations 3.3.1 and 3.6.1, the presumption of a correct meter, and the legality of average billing and Late Payment Surcharge.

The Bench observed, “Jurisdiction is not an end in itself; it is a fundamental means to achieve the ends of justice.” It further recorded, “The power to provide a public utility is a fiduciary trust, not a charter for administrative high-handedness.”

While examining the regulatory framework, the Court stated that Regulation 3.3.1 establishes the presumption of a correct meter and Regulation 3.6.1 permits revised billing only “after the defect is established.” It held, “this power is not a roaming commission; it is strictly predicated upon the ‘establishment of a defect.’” The Bench also recorded, “We hold that the Potential Transformer (PT), being an inseparable component of the metering circuit, falls squarely under the statutory protection of a ‘correct meter.’”

On burden of proof, the Court recorded, “The doctrine of onus probandi dictates that the Licensee must establish the terminus a quo (birth of defect) and the terminus ad quem (rectification) with clinical precision.”

Upon examining the records, the Bench stated, “In the absence of a proven terminus ad quem (the point of return to normalcy), the calculation of an ‘average’ becomes a mathematical fiction—an anchor cast into mid-air.”

Regarding perversity, the Court quoted, “A decision would be perverse if it is so quite absurd that no reasonable person could have reached that conclusion... It should not be based on a non-existent fact.” It further observed, “An order is perverse when the conclusion reached is diametrically opposed to the findings recorded therein.” The Court recorded, “A quasi-judicial authority cannot find the factual basis ‘unproven’ yet hold the citizen ‘liable’ in law.”

Referring to Mohinder Singh Gill, the Bench quoted, “When a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out.”

On the surcharge, the Court recorded, “Interest and surcharges cannot breathe life into a void debt.” It further stated, “Quod ab initio non valet, in tractu temporis non convalescit—that which is void from the beginning does not become valid by the lapse of time.”

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The Court recorded, “Accordingly, the Appeal (F.M.A. 179 of 2023) is dismissed.” It further directed that “The principal supplemental demand (crystallized at Rs.47,06,213/-) is declared null and void. The Licensee shall delete and waive the entire LPSC of Rs. 32.72 Lakhs and all associated interest. The sum of Rs.11,70,855/- deposited under protest shall be adjusted against future bills.  All disconnection notices are quashed. CAN 1 of 2022, CAN 2 of 2022 and CAN 3 of 2025 are disposed of accordingly.” and “No order as to costs.”

Advocates Representing the Parties:

For the Petitioners:  Mr. Srijan Nayak, Ld. Adv.; Mr. Sujit Shankar Koley, Ld. Adv.
For the Respondents:  Mr. Sayan Chattopadhyay, Ld. Adv.; Ms. A. Acharya, Ld. Adv.; Ms. S. Jana, Ld. Adv.; Ms. Sushama Hansda, Ld. Adv.

Case Title: The West Bengal State Electricity Distribution Company Limited & Ors. vs Jyotish Chandra Rice Mill & Ors.

Case Number: FMA 179 of 2023

Bench: Justice Rajarshi Bharadwaj and Justice Uday Kumar