Calcutta High Court: A division bench comprising of T.S. Sivagnanam,* CJ., and Hiranmay Bhattacharyya, J., dismissed the appeal and upheld the Distribution Company’s right to levy DPS and take necessary action if the payment was not made by the specified date. The Court held that the obligation to pay delayed payment surcharge (DPS) arises when there is a default in payment, and such liability is dynamic based on the delay.
Brief Facts
This case involves an intra-court appeal against a judgment and order dated 08.06.2023 by the single-judge bench of this Court. The appellant filed a writ petition challenging an order passed by the Central Grievance Redressal Officer (CGRO) in favor of the respondent, West Bengal State Electricity Distribution Company Limited (Distribution Company). The distribution company had demanded a DPS on electricity charges from the appellants. Aggrieved by the order dated 08.06.2023, which held that the appellant is liable to pay DPS, the appellant preferred the present appeal before this Court.
Moot Point
Whether the demand for DPS by the distribution company was sustainable and whether the appellants were liable to pay the DPS?
Contentions
The appellant contended that the sum due from any consumer under Section 56(2) of the Electricity Act, 2003 (the Act) shall not be recoverable after a period of two years from the date when such sum became first due. It was argued that DPS was first demanded after the expiration of the two-year period from the issuance of the supplementary bill.
The respondent contended that the calculation of DPS was dynamic, dependent on the delay in payment, and therefore, it could be invoked whenever there was a default in payment.
Court’s Observation
The Court rejected appellant’s contention and held that the obligation to pay DPS arises not from the issuance of the first bill, but from the first instance of non-payment of the concerned charges. It was noted that the calculation of DPS is a dynamic formula, levied when payment is made belatedly, and hence, the period of limitation under Section 56(2) of the Act does not apply in the same way as for fixed liabilities.
“A combined reading of Regulation 4.1.4 with Section 56 clearly indicates the approval of the liability to pay DPS arises not from the date when the bill was first raised for payment of the original principal amount but from the first instance of non-payment of the concerned charges.”
The Court also examined the relevant regulations and found that the appellant had defaulted on payment and was liable to pay DPS.
Court’s Verdict
The Court dismissed the appeal and upheld the single-judge bench’s order. The Court held that the Distribution Company has a right to levy DPS and take necessary action if payment was not made. The time stipulated for payment was extended till 30.09.2023.
[Jaishree Steels (P) Ltd. v. West Bengal State Electricity Distribution Co. Ltd., 2023 SCC OnLine Cal 2356, order dated 16-08-2023]
*Judgment by Chief Justice T.S. Sivagnanam
Advocates who appeared in this case :
Mr. Parathi Sarathi Sengupta, Sr. Adv.; Mr. Ratnanko Banerji, Sr. Adv.; Mr. Ratnesh Kumar Rai, Mr. Ankan Rai, Counsel for the Appellant;
Mr. Abhratosh Majumder, Sr. Adv.; Mr. Suddhasatva Banerjee, Mr. Sandip Dasgupta, Counsel for the Respondent.
