The Supreme Court has dismissed an appeal filed by Dakshinanchal Vidyut Vitran Nigam Ltd. (DVVNL) challenging the decision concerning a demand of ₹57,74,164 towards Minimum Consumption Guarantee Charges (MCGC) raised against a consumer for the period from February 1998 to September 1998.
A Bench comprising Justice S.V.N. Bhatti and Justice N.V. Anjaria delivered the judgment on September 10, 2026, in Dakshinanchal Vidyut Vitran Nigam Ltd. v. Vidut Lokpal, Uttar Pradesh & Ors., Civil Appeal No. 5099 of 2013.
The dispute arose from an electricity connection sought by the consumer for a 4,000 KVA load. At the relevant time, DVVNL agreed to sanction and release only 2,000 KVA, resulting in an agreement dated February 24, 1997.
Subsequently, DVVNL claimed that due to improvement in power generation, it became capable of supplying the remaining 2,000 KVA. On January 31, 1998, it offered to increase the contract load, subject to the consumer entering into an agreement.
However, the consumer, through a letter dated September 14, 1998, expressed unwillingness to accept the additional supply. The Supreme Court noted that there was no material showing that the additional 2,000 KVA was actually released to the consumer.
Despite the events relating to the additional load having occurred in 1998, DVVNL raised a demand on February 13, 2007, seeking ₹57,74,164 towards MCGC for the period February 1998 to September 1998.
The consumer challenged the demand before the Consumer Grievance Redressal Forum and subsequently before the Electricity Ombudsman. The Ombudsman set aside the demand, holding, among other things, that the consumer had not consented to the additional load and that the demand was barred by the limitation prescribed under Section 56(2) of the Electricity Act, 2003.
The Supreme Court considered the limitation issue in light of its earlier judgment in Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Limited & Anr. v. Rahamatullah Khan alias Rahamjulla, reported in (2020) 4 SCC 650.
The Court reiterated that electricity charges become “first due” when the bill quantifying the charges is issued to the consumer, even though the underlying liability may arise from consumption.
It further noted that Section 56(2) restricts the licensee's statutory power to disconnect electricity supply for non-payment after the expiry of the prescribed two-year period, unless the amount has continuously been shown as recoverable as arrears in bills raised for the relevant past period.
Applying these principles, the Supreme Court held that the circumstances disentitled the appellant from raising the demand under Section 56(2) of the Electricity Act, 2003.
The Court also noted that the consumer's liability for the additional load would arise only when the agreed quantity of electricity was actually released. In the present case, the appellant could not establish that the consumer had consented to the additional load or that the additional 2,000 KVA had actually been released to it.
Consequently, the Supreme Court concluded that the appeal failed and was dismissed. Pending applications, if any, were also disposed of.
The judgment reiterates the importance of limitation under Section 56(2) of the Electricity Act, 2003, particularly where a distribution licensee seeks to recover old electricity-related dues. The case also underscores that a consumer cannot be saddled with charges for an additional electricity load merely because the licensee claims to have offered the load, when there is no evidence that the consumer accepted or actually received the additional supply.
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