21 August 2024 Consumer Law >> Civil & Consumer Law   |   Energy, Infrastructure & Resources >> Miscellaneous  

A recent decision by the Consumer Grievance Redressal Forum (CGRF) has stirred considerable debate in the electricity distribution sector, particularly regarding the recovery of bills issued due to billing errors. The case in question involved an order dated November 15, 2022, where the CGRF directed an electricity distribution company to revise a bill by considering only 7,939 units of consumption for November 2020, rather than the initially billed amount based on incorrect meter readings.

Case Background:

The dispute centers around a consumer who had a rooftop solar net metering connection sanctioned on June 9, 2020. The consumer's existing electricity meter was replaced with one suitable for the solar setup. However, it was later discovered that the multiplying factor (MF) used for billing was incorrect. Instead of the correct factor of 20, the meter was set to a factor of 1. This error resulted in an underestimation of the bill, which was subsequently corrected, leading to a supplementary bill of Rs. 7,35,010 issued on June 26, 2022.

Consumer's Grievance:

The consumer challenged this bill before the CGRF, arguing that the revised bill, which used the correct multiplying factor, was excessive and unfair. The consumer also contended that during the pandemic lockdown of 2020, their hotel operated at reduced capacity, which should have reflected in lower electricity consumption. Furthermore, there were discrepancies in meter readings that suggested potential faults in the meter itself.

CGRF's Order:

In its order, the CGRF took into account the pandemic's impact on the consumer's operations and the substantial increase in billing amount due to the MF correction. The CGRF directed the electricity company to issue a revised bill based on an estimated consumption of 793 units for November 2020 and to adjust the payments already made by the consumer. It was also noted that the application of a multiplier of 1 instead of 20 was not considered a bona fide mistake, thereby reducing the recoverable amount.

Legal Analysis:

The electricity distribution company challenged this order, arguing that the incorrect application of the multiplying factor constituted a bona fide mistake and was, therefore, correctable under the law. The company cited the Supreme Court's judgment in Prem Cottex Vs. Uttar Haryana Bijli Vitran Nigam Ltd. (2021), which supports the right of a utility to correct billing errors. In response, the consumer's counsel argued that the CGRF's decision was justified given the exceptional circumstances of the lockdown and the discrepancies in meter readings.

Supreme Court Ruling:

The Supreme Court’s judgment in K.C. Ninan Vs. Kerala State Electricity Board (2023) provides crucial insights into the handling of billing disputes involving bona fide errors. The Court upheld that utilities could correct bills for bona fide mistakes but emphasized that such corrections should not penalize consumers unduly. The Court confirmed that while utilities can issue revised bills, they must not misuse this right to impose unfair financial burdens on consumers.

Conclusion:

The court has ruled in favor of the electricity company, stating that they were right to issue a revised bill based on the corrected multiplying factor. However, recognizing the significant amount involved, the court has allowed the consumer to pay the revised bill in three equal installments over six months. This case highlights the critical balance between correcting bona fide errors and ensuring fair treatment for consumers. It underscores the need for utilities to exercise their rights to correct mistakes judiciously while considering the impact on consumers, particularly in exceptional circumstances like a pandemic.