Authority: Supreme Court of India, Civil Appellate Jurisdiction

Order Date: September 10, 2026

Case Overview

  • Parties: Appellant – Dakschinanchal Vidyut Vitran Nigam Ltd (distribution licensee); Respondent No. 3 – Vidut Lokpal, Uttar Pradesh (consumer). The appeal also involved other respondents.
  • Background: Respondent No. 3 applied for a 4000 KVA electricity connection. The appellant initially sanctioned 2000 KVA and later offered an additional 2000 KVA on 31‑01‑1998, subject to a new agreement. Respondent declined the additional load in a letter dated 14‑09‑1998.
  • Agreement: An agreement dated 24‑02‑1997 covered the initial 2000 KVA load. The appellant claimed readiness to supply the additional 2000 KVA after improved generation capacity.
  • Demand: On 13‑02‑2007, the appellant demanded Rs 57,74,164 as Minimum Consumption Guarantee Charges (MCGC) for the period February–September 1998, asserting that the consumer was liable for the full 4000 KVA.
  • Regulatory Framework: The demand was contested under the U.P. Electricity Regulatory Commission (Consumer Grievance Redressal Forum and Electricity Ombudsman) Regulations, 2007 (Regulation 8). Relevant statutes include Electricity Act 2003 – Sections 42(5), 42(6), 56(2); and Section 181(2)(r),(s) of the Act.
  • Procedural History:
  • Respondent approached the Consumer Grievance Redressal Forum (CGRF); the CGRF gave a split verdict and did not resolve the grievance.
  • Respondent filed a representation before the Electricity Ombudsman under Regulation 8.1. The Ombudsman set aside the demand, finding no consumer consent to the additional load and that the demand was barred by the limitation period under Section 56(2).
  • The appellant filed Misc. Single No. 4237 of 2008 before the High Court of Judicature at Allahabad (Lucknow Bench), challenging Clause 8 of the 2007 Regulations as ultra vires.
  • The High Court upheld the Ombudsman’s decision and held Clause 8.1 and 8.2 ultra vires of the Electricity Act.
  • Legal Reasoning:
  • The Supreme Court noted that the demand dated 13‑02‑2007 was issued after the Electricity Act 2003 came into force; therefore, the demand must comply with Section 56(2), which imposes a two‑year limitation from the date the charge becomes “first due”.
  • The Court observed that no bill for the additional 2000 KVA was ever issued, and the consumer never consented to the extra load; consequently, the liability to pay arose only when the load was actually supplied, which never occurred.
  • The Court affirmed that the limitation period (two years) had expired, and even under the Limitation Act 1963 or the U.P. Government Electrical Undertaking (Dues Recovery) Act 1958, the demand would be time‑barred.
  • The Court reiterated that Clause 8 of the 2007 Regulations, which allowed the licensee to seek redress before the Ombudsman, is ultra vires because Section 42(6) of the Electricity Act permits only the consumer to approach the Ombudsman, leaving the licensee without such remedy.
  • The Court cited precedents (K C Ninan v. Kerala State Electricity Board and Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Ltd. v. Rahamatullah Khan) to support its interpretation of the limitation provisions and the scope of the Ombudsman’s jurisdiction.

Final Outcome

  • The Civil Appeal No. 5099 of 2013 is dismissed.
  • The demand of Rs 57,74,164 for MCGC is held to be barred by the limitation period under Section 56(2) of the Electricity Act 2003.
  • Clause 8.1 and 8.2 of the U.P. Electricity Regulatory Commission Regulations 2007 are declared ultra vires and inconsistent with Section 42(6) of the Electricity Act.
  • No relief is granted to the appellant; pending applications, if any, will be disposed of accordingly.

Topics: Electricity Regulation, Consumer Protection