The Patna High Court’s 2021 decision addresses whether a distribution licensee can raise a large, retrospective “supplementary bill” when it discovers that monthly bills for a High Tension (HT) industrial consumer were mistakenly computed using the wrong multiplying factor (MF). The Court dismissed the writ petition, holding that the correction of a clerical billing error—switching from MF-01 to MF-02 after a replacement metering unit was installed—was lawful, especially where the consumer had long known the meter was MF-02 and never disputed the readings.

Simplified Explanation of the Judgment

This case arose from a dispute over a very large supplementary electricity bill raised after five years. The consumer (petitioner), an HT industrial unit, originally had an HT service metering unit installed on 25.04.2014. That unit later burned out. A new metering unit was installed on 24.08.2015, and from that date forward the unit’s documentation showed “MF 02” (multiplying factor two). In HT systems, metering often uses current and potential transformers; meters then register a scaled value, and bills must be computed using the appropriate multiplying factor. If the MF is 02, the recorded units must be multiplied by two for billing.

The distribution company mistakenly continued to bill using MF-01 even after the MF-02 metering unit was installed. This meant the consumer was billed for only half the energy consumption for several years. In December 2020, the utility discovered the error and raised a supplementary demand for the differential amount—over ₹5.67 crore—for the period August 2015 to October 2020, giving credit for earlier payments. The consumer challenged this demand and sought court protection against disconnection, arguing (a) the bills had been raised “erroneously” by the company itself and could not be corrected so late, (b) the meter should be checked with a “check meter” before insisting on any revised demand, and (c) disconnection for non-payment of the additional demand was impermissible under law.

The company explained that: (i) the first metering unit (MF-01) had burnt; (ii) a new unit with MF-02 was installed on 24.08.2015; (iii) the installation report clearly recorded “M.F. 02” and was signed by the consumer’s authorized representative; and (iv) the monthly billing software, however, was inadvertently left at MF-01 due to human error. Thus, the supplementary demand merely corrected a clerical error: the same meter readings, multiplied by the correct MF-02. The company also stated it tested the meter on 15.12.2020 in the presence of the consumer’s representative, who wrote he was “not satisfied” but did not specify any concrete deficiency.

The Court emphasized a few key points. First, there was no dispute on the actual readings recorded by the MF-02 metering unit. The consumer never alleged that the meter was defective or that the readings were wrong. The only issue was the arithmetic—applying MF-01 instead of MF-02—which the company later corrected. Second, the consumer had knowledge of the MF-02 status from day one because the installation report dated 24.08.2015 prominently mentioned “M.F. 02,” and it was accepted and signed by the consumer’s representative. Third, a mere billing omission or oversight by the licensee does not create an indefeasible right in the consumer to retain the under-billed amount; the company can lawfully issue a supplementary bill to recover the amount actually due.

On the consumer’s request for a check meter, the Court found no merit. Where a meter has already been inspected/tested and no specific defect is pointed out, a vague claim of being “not satisfied” cannot justify another round of testing or the installation of a check meter as a matter of entitlement. The purpose of testing is to establish the correct factual position, not to satisfy subjective preferences. In this case, the consumer did not identify any concrete lapse in the 15.12.2020 inspection or any defect in the metering system.

Regarding disconnection, the company assured the Court that it would not disconnect supply solely for non-payment of the supplementary demand; however, current/future monthly bills (from November 2020 onward) must be paid, failing which disconnection in accordance with law would be open to the company. The Court recorded this position and further directed the company to fix responsibility for the internal billing lapse within three months. It also noted the availability of an installment facility per a regulatory order: if the HT consumer opts for installments, it must deposit at least 25% of arrears upfront, with the balance in up to six equal monthly installments along with the current bill and interest at the delayed payment surcharge rate, on a reducing balance basis.

In the result, the writ petition was dismissed. The supplementary demand based on MF-02 was upheld as a lawful rectification of a clerical error. The consumer could not avoid payment by questioning MF application years later, especially after acknowledging MF-02 at the time of installation and never disputing meter readings.

Significance or Implication of the Judgment

For government utilities and distribution licensees: The judgment confirms that a utility may issue a retrospective supplementary bill to correct an under-billing error arising from a wrong multiplying factor, so long as the underlying meter readings are undisputed and the correct MF is documented. This reduces revenue leakage from human or software errors and encourages internal audits to catch such lapses.

For consumers (industrial and commercial): The decision clarifies that acknowledgement of an MF-02 metering unit carries practical billing consequences. If bills are mistakenly computed using MF-01, the consumer remains liable for the difference when the error is discovered. Vague objections to testing or generalized dissatisfaction will not halt recovery. That said, the Court’s recording of the utility’s assurance—no disconnection solely for non-payment of the supplementary component—and the availability of installment options offer practical protection against sudden financial shocks.

For practitioners: The case underlines that disputes limited to billing arithmetic (application of MF) without any challenge to metering accuracy or to the documented MF are unlikely to succeed in writ jurisdiction. The Court treated the oversight as a “clerical” error capable of rectification and not a substantive dispute on consumption.

Legal Issue(s) Decided and the Court’s Decision with Reasoning

• Whether a distribution licensee can raise a retrospective supplementary demand to correct application of the multiplying factor (MF-02 instead of MF-01) where the MF-02 status was recorded at installation and acknowledged by the consumer: Yes. The Court held this is a permissible rectification of a billing error, not a change in consumption or metering. The consumer had knowledge of MF-02 (installation report dated 24.08.2015 signed by its representative), never disputed the meter readings, and cannot claim an indefeasible right based on the licensee’s oversight.
• Whether the consumer is entitled to demand installation of a check meter merely because it is “not satisfied” with the inspection: No. Absent specific defects or concrete objections raised at the time of inspection, a check meter cannot be demanded as of right. The consumer’s generic note of dissatisfaction did not disclose any fault in the metering unit or in the inspection of 15.12.2020.
• Whether supply may be disconnected for non-payment: Not for the supplementary component alone, as recorded from the respondents’ assurance; but current bills must be paid and non-payment of current dues may attract disconnection strictly in accordance with law. The Court also noted the installment facility (25% upfront; balance in up to six monthly installments with DPS interest).

Judgments Referred by Parties (with citations)

• Assistant Engineer (D1), Ajmer Vidyut Vitran Nigam Ltd. v. Rahamatullah Khan @ Rahamiulla, (2020) 4 SCC 650 — cited by the petitioner to argue against disconnection on account of additional demand.

Judgments Relied Upon or Cited by Court (with citations)

• (None specifically cited besides statutory references and the regulatory order; the Court primarily relied on the factual record, Section 56 of the Electricity Act, 2003, and the BERC installment order.)

Case Title

• M/s Gokul Steels Private Limited v. South Bihar Power Distribution Company Limited & Ors.

Case Number

• Civil Writ Jurisdiction Case No. 9742 of 2020

Citation(s)

2021(1)PLJR 484

Coram and Names of Judges

• Hon’ble Mr. Justice Ahsanuddin Amanullah (Oral Judgment dated 13.01.2021)

Names of Advocates and who they appeared for

• For the petitioner: Mr. Suraj Samdarshi, Advocate
• For the respondents: Mr. Umesh Prasad Singh, Senior Advocate; with Mr. Prakash Kumar, Advocate

Link to Judgment

https://patnahighcourt.gov.in/viewjudgment/MTUjOTc0MiMyMDIwIzEjTg==-xFY34rOnKFs=

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