Court Dismisses Petitioner's Claim for Interest on Deposit under Electricity Act, 2003
In a significant ruling, the Bombay High Court, presided over by Justice Amit Borkar, dismissed a writ petition filed by Illiyas Mangroo Shaikh seeking interest on a statutory deposit made under Section 127(2) of the Electricity Act, 2003. The petitioner had challenged the decision of the Appellate Authority, which set aside a final assessment order by the Assessing Officer that accused the petitioner of unauthorized electricity use.
The case revolves around an inspection conducted by the Bombay Electricity Supply and Transport Undertaking (BEST), which alleged that Shaikh's factory bypassed the electricity meter. Following the inspection, a provisional assessment was issued based on the connected load. Shaikh contested the assessment under Section 127, depositing 50% of the assessed amount as required.
The Appellate Authority subsequently allowed Shaikh's appeal, concluding that the Assessing Officer did not follow the correct procedure in determining unauthorized electricity use. It directed the refund or adjustment of the deposit in future bills but refused to grant interest on the deposit, prompting Shaikh to file the present petition.
Shaikh's counsel argued that fairness demanded interest on the deposit, citing Section 127(6), which prescribes interest for consumer defaults in payment of the assessed amount. However, the court found no statutory provision conferring a reciprocal right to interest for the consumer when the assessment is deemed unsustainable.
Justice Borkar emphasized that the statutory deposit under Section 127(2) is a condition precedent for filing an appeal, not a payment toward consumption charges. The court reiterated that interest liability under Section 127(6) is unambiguously imposed on consumers for delayed payment but does not extend to the licensee if the assessment is overturned.
The court also dismissed arguments based on Section 62(6) of the Act, which mandates interest for excess recovery in tariff cases, noting that the deposit under Section 127(2) is not analogous to tariff payments. Furthermore, the court cited a precedent from the case of Executive Engineer, Maharashtra State Electricity Distribution Co. Ltd. v. Pioneer Estate Corporation, which held that interest could not be granted to consumers whose appeal is allowed.
Justice Borkar concluded that the petitioner's claim for interest lacked an enforceable right under the current statutory framework, and no jurisdictional error or perversity was found in the Appellate Authority's decision. Consequently, the writ petition was dismissed, affirming that the petitioner was not entitled to interest on the statutory deposit.
The ruling underscores the court's adherence to statutory interpretation and the principle that courts cannot amend legislation by reading additional rights into it. The decision serves as a reminder that statutory deposits required for appeals are not subject to interest unless explicitly provided for by the legislature.
Bottom Line:
Electricity Act, 2003 - No interest is payable on statutory deposit made under Section 127(2) by a consumer if the assessment is set aside in appeal - The deposit is a condition precedent for filing an appeal and not a payment towards consumption charges.
Statutory provision(s): Sections 126, 127, and 62 of the Electricity Act, 2003; Article 227 of the Constitution.
