THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.15965 OF 2003 DATED JULY, 2011 BETWEEN Everest Ice Industries …Petitioner And A.P.Eastern Power Distribution Co. Ltd. Daba Gardens, Visakhapatnam-20, Rep. by its Chairman & Managing Director and others. …Respondents THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.15965 OF 2003 O R D E R The Assistant Divisional Engineer, Eastern Power Distribution Company of Andhra Pradesh Limited (APEPDCL), Madhurawada, Visakhapatnam, the fourth respondent, by notice dated 07.12.2002 called upon the petitioner company to pay a sum of Rs.1,28,385/- towards back billing charges from 19.05.2002 to 18.11.2002, a period of six months. The said notice was consequent to the inspection on 18.11.2002 which revealed that the meter installed in the petitioner company’s premises was recording consumption with an average error of -18.8%. Thereafter, by notice dated 22.03.2003 the fourth respondent, basing on an earlier inspection on 03.04.2000, wherein the petitioner company’s meter was found functioning with an error of - 19.3%, called upon the petitioner company to pay a sum of Rs.5,71,324/- towards back billing charges from 03.04.2000 to 17.02.2003, giving credit to the amount already paid by the petitioner company in response to the back billing notice dated 07.12.2002. The notice dated 22.03.2003 was thereafter revised by the Divisional Engineer, APEPDCL, Visakhapatnam, the third respondent, under proceedings dated 09.07.2003 calling upon the petitioner company to pay a sum of Rs.4,95,116/-. The third respondent took note of the fact that the meter error noticed during the inspection on 18.11.2002 was - 18.8% and adopted the same for calculating the back billing charges from 04.04.2000 to 18.05.2002 and 19.11.2002 to 17.02.2003. The petitioner company was required to pay the said amount within thirty days under threat of disconnection of power supply. These three notices/proceedings are subjected to challenge in this writ petition. By virtue of the interim orders granted by this Court, disconnection of power supply to the petitioner company was stayed subject to the petitioner company continuing to pay for the contracted load in accordance with the terms and conditions of supply. The petitioner company was supplied electricity through service connection bearing No.123/75. The service connection meter was inspected on 03.04.2000 in the first instance and was found recording electricity consumption with an error of -19.3%. The fourth respondent thereupon addressed letter dated 27.05.2000 bringing this fact to the notice of the petitioner company and levying back billing charges from 03.10.1999 to 03.04.2000 (a period of six months) quantified at Rs.98,676/-. This amount was paid by the petitioner company in instalments without demur. Pertinent to note, no action was taken by the APEPDCL to replace the faulty meter. Well over two years thereafter, inspection of the petitioner company’s meter on 18.11.2002 reflected an error of -18.8%. Basing on this finding, the fourth respondent issued the impugned notice dated 07.12.2002 quantifying the back billing charges for six months from 19.05.2002 to 18.11.2002 at Rs.1,28,385/-. This amount was also paid by the petitioner company. The defective meter was removed and replaced by the APEPDCL only on 17.02.2003. While so, the fourth respondent issued notice dated 22.03.2003 opining that as the defective meter was continued till 17.02.2003, loss was sustained by the APEPDCL and he accordingly quantified back billing charges from 03.04.2000 to 17.02.2003 on the basis of an error of -19.3% which was originally noted in the inspection dated 03.04.2000. Based on such calculation, he arrived at the figure Rs.6,41,324/- and giving credit for the amount of Rs.70,000/-, which had been paid by the petitioner company pursuant to the back billing notice dated 07.12.2002, he put the net liability of the petitioner company at Rs.5,71,324/-. This demand was however revised by the third respondent under proceedings dated 09.07.2003 adopting the error in the meter at -18.8% instead of -19.3% and the final amount due and payable by the petitioner company was quantified at Rs.4,95,116/-. The petitioner company assails these demands on the ground that they are not in keeping with the statutory provisions which limit the right of the APEPDCL to collect back billing charges only for six months. Further, the petitioner company assails the action on the ground that it is contrary to the procedure prescribed in Section 26 of the Indian Electricity Act, 1910 (for brevity, ‘the Act of 1910’) and the terms and conditions of supply. The APEPDCL filed a counter stating that as the meter was found to be faulty, the consumer would be liable to pay for the shortfall owing to such meter defect till it was replaced. It therefore sought to justify the back billing charges levied upon the petitioner from the date of the initial inspection upto the date of replacement of the meter. Heard Sri Kakara Venkata Rao, learned counsel for the petitioner company, and Smt.Jyothi Eshwar Gogineni, learned standing counsel for the APEPDCL. At the outset, it may be noticed that the petitioner company paid the amount demanded by the APEPDCL under notice dated 07.12.2002 without protest. No dispute was raised by the petitioner company, be it under Section 26(6) of the Act of 1910 or otherwise, at that stage. It would therefore not be open to it to lay a challenge thereafter to the said notice and seek refund. The prayer of the petitioner company in so far as this notice is concerned, is therefore liable to be rejected. However, the same cannot be said for the subsequent demand under notice dated 22.03.2003 which was revised thereafter under proceedings dated 09.07.2003. It is pertinent to note that the initial inspection which reflected a defect in the meter was as long back as on 03.04.2000. Having detected such defect, the APEPDCL collected back billing charges for six months under its letter dated 27.05.2000. There is no explanation forthcoming from the APEPDCL as to why the defective meter was not replaced at that stage. Section 26 of the Act of 1910 deals with meters. Under Section 26(6), if there is a difference or dispute as to whether a meter is or is not correct, it has to be decided upon the application of either party by an Electrical Inspector. The power of the licensee under Section 26(4) to take off or remove a meter is subject to such difference/dispute being determined by the Electrical Inspector. Condition No.22.2.1 of the general terms and conditions of supply states to the effect that electricity supplied to a consumer has to be ascertained by means of a correct meter which shall be hired by the Board and the Board shall keep the meter correct. Under Condition No.22.2.2 the Board has to conduct a test check of meters at intervals of six months or such other period as it may consider necessary and once in every year, HT meters have to be recalibrated and standardized by the Board in the presence of the consumer or his representative. Thus, the obligation to keep the meter functioning correctly squarely rests upon the APEPDCL. A Division Bench of the Madhya Pradesh High Court in HAMIDULLAH KHAN, JABALPUR V/s. CHAIRMAN, MADHYA PRADESH ELECTRICITY BOARD, RAMPUR[1], opined that a reading of Section 26(6) of the Act of 1910 made it clear that a dispute whether a meter was correct or incorrect could only be resolved by the Electrical Inspector. The Bench observed that the action of the Electricity Board in removing the meter without referring the dispute about its correctness to the Electrical Inspector and estimating the quantity consumed for the period during which the meter was allegedly not giving a correct reading was unsustainable, as such an estimate could have been made only by the Electrical Inspector under Section 26(6) of the Act of 1910 and not by the Board unilaterally. In that case, the revised bill was for over five years and was held to be wholly unjustified as, even in a case referred to the Electrical Inspector under Section 26(6) of the Act of 1910, the revised estimate could cover only a period of six months and not beyond. I n KLAYMAN PORCELAINS LTD. V/s. SUPERINTENDING ENGINEER, OPERATION, HYDERABAD[2], a Full Bench of this Court held that where the issue centered around the question as to whether a meter was correct or not, Section 26(6) of the Act of 1910 shall apply. The Full Bench however observed that whether a party has waived his right in this regard would depend upon the facts and circumstances of the case. I n BOMBAY ELECTRIC SUPPLY AND TRANSPORT UNDERTAKING V/s. LAFFANS (I) PVT. LTD.[3], the factual scenario was similar to the case on hand. The consumer in that case also did not raise a protest as to the finding of a defect in the meter and the service provider thereafter levied back billing charges for a period in excess of six months. The Supreme Court observed that what was contemplated by Section 26(6) of the Act of 1910 is a running meter which, on account of some technical defect, registers the amount of energy supplied beyond the prescribed limits of error. In effect, a meter which is either running slow or fast with the result that it does not register the correct amount of energy supplied. On facts, the Supreme Court found that both the parties, being the service provider as well as the consumer, abided by the readings of the defective meter and therefore held that the service provider could not revise the demand thereafter. Reference was made to Section 26(4) of the Act of 1910 in the context of removal of the meter in respect of which a dispute or difference under Section 26(6) had arisen and it was held that the embargo under Section 26(4) was placed for the purpose of preserving the evidence. The Supreme Court observed that the Electrical Inspector applies scientific methods of investigation to find out whether the meter was incorrect and if so, the extent of such error for the purpose of calculating the back billing charges for six months. This would necessarily require that the meter remains intact for such investigation. As the Court found that the meter itself had been lost by the act of the service provider in removing it, it could not be permitted to take advantage of its own act and omission and raise additional bills having failed to proceed in accordance with Section 26(6) of he Act of 1910. In the light of the aforestated legal position, the action of the APEPDCL in unilaterally estimating the loss caused to it by the fault in the meter without seeking reference to an Electrical Inspector is in violation of Section 26(6) of the Act of 1910. Such an approach as pointed out in HAMIDULLAH KHAN, JABALPUR1 was not within its domain and was therefore unsustainable. However, as pointed out in KLAYMAN PORCELAINS LTD.2, once the petitioner company acquiesced with the said action of the APEPDCL, in effect waiving its right under Section 26(6) of the Act of 1910, and paid the amounts due under the notices dated 27.05.2000 and 07.12.2002, it cannot now protest or challenge the same. In so far as the notice dated 22.03.2003, revised thereafter under proceedings dated 09.07.2003, is concerned, the matter stands on a different footing. Pertinent to note, the notice dated 22.03.2003 was itself issued after the removal of the meter on 17.02.2003. Therefore, the evidence, viz., the meter was no longer available for a dispute to be raised under Section 26(6) of the Act of 1910. In the light of the observations of the Supreme Court in LAFFANS (I) PVT. LTD.3, once the meter was taken away in violation of the prescribed procedure, it is not open to the APEPDCL to take advantage of its own act in doing so and its omission in seeking a reference of the dispute to the Electrical Inspector under Section 26(6) of the Act of 1910. It could not have raised an additional demand thereafter. Further, as pointed out in the aforestated decisions, once the Electrical Inspector under Section 26(6) of the Act of 1910 is empowered to levy back billing charges only for a period of six months, it would not be open to the APEPDCL to levy back billing charges upon the petitioner company for a period in excess thereof. The Writ Petition is accordingly allowed to the extent indicated above setting aside the demand raised by the Assistant Divisional Engineer, APEPDCL, Madhurawada, Visakhapatnam, in his letter dated 22.03.2003 and the revised demand raised by the Divisional Engineer, APEPDCL, Visakhapatnam, under proceedings dated 09.07.2003. It is however made clear that it would not be open to the petitioner company to seek refund of the amounts paid by it in response to the notice dated 07.12.2002 or earlier. Miscellaneous petitions in this writ petition are dismissed consequent to this final order. No order as to costs. ---------------------------- SANJAY KUMAR, J. _______ JULY, 2011 PGS [1] AIR 1983 MP 1 [2] 2001 (5) ALD 732 [3] AIR 2005 SC 2486