By Nivedita Bhardwaj

Introduction

The supply of electricity, a critical public utility, is not merely a commercial activity but a statutory obligation imbued with public law responsibilities. Distribution licensees often state-controlled entities, operate within a framework that demands fairness, transparency, and accountability. Disputes relating to excessive billing, defective meters, and retrospective demands frequently test the limits of administrative discretion.

In a significant ruling in West Bengal State Electricity Distribution Company Limited v. Jyotish Chandra Rice Mill (F.M.A. 179 of 2023, decided February 2026)1, the Calcutta High Court emphatically held that a public utility functions as a fiduciary, not an authoritarian administrator. The Court set aside a supplementary electricity demand of over ₹47 lakh raised by West Bengal State Electricity Distribution Company Limited, finding it to be speculative, unsupported by evidence, and contrary to statutory regulations.

Statutory and Regulatory Framework

Electricity Law and Metering Obligations

Under the Electricity Act, 2003:

In West Bengal, the governing framework is the West Bengal Electricity Regulatory Commission (Electricity Supply Code) Regulations.

Key provisions include:

These provisions make it clear that the power to issue supplementary bills is conditional and evidence-based, not discretionary.

Factual Background

The respondent, Jyotish Chandra Rice Mill, was an industrial consumer receiving high-tension electricity supply through a metering system involving a potential transformer (PT).

The consumer challenged the demand before the Consumer Grievance Redressal Forum and subsequently the Electricity Ombudsman. Although both forums noted the absence of conclusive evidence, the demand was effectively sustained, prompting WBSEDCL’s appeal before the High Court.

Issues Before the Court

The Division Bench considered the following key issues:

Court’s Analysis

PT as Integral to the Metering System

The Court held that the potential transformer is an integral component of the metering apparatus. Consequently, it falls within the scope of Regulation 3.3.1, and the presumption of correctness applies to the entire metering system.

This presumption could only be rebutted through credible technical evidence, which WBSEDCL failed to provide.

Failure to Establish Defect and Its Duration

A central finding of the Court was that WBSEDCL failed to discharge its evidentiary burden:

The Court emphasised that revised billing requires precise identification of the defect period (terminus a quo and terminus ad quem). In the absence of such evidence, the demand was reduced to mere conjecture.

Limits on Average Billing

The Court clarified that Regulation 3.6.1 does not grant a blanket or discretionary power to raise average bills.

The impugned demand, therefore, lacked jurisdictional foundation.

Perversity and Administrative Law Principles

The Court found the Ombudsman’s order to be perverse, relying on principles laid down in State of Uttar Pradesh v. Johri Mal2, that a decision unsupported by evidence or based on irrelevant considerations is legally unsustainable.

Further, invoking Mohinder Singh Gill v. Chief Election Commissioner3, the Court reiterated that:

Public Utility as Fiduciary

In a significant doctrinal observation, the Court held that:

The issuance of a speculative demand, coupled with surcharge and threat of disconnection, was characterised as administrative high-handedness.

The Court further held that the Interest or late payment surcharge cannot be levied on an invalid demand and a void demand cannot be validated by the passage of time or accrual of penalties.

Operative Directions

The Court dismissed WBSEDCL’s appeal and issued the following directions:

Conclusion

The judgment in WBSEDCL v. Jyotish Chandra Rice Mill is a strong reaffirmation of consumer protection in the realm of public utilities. It underscores that:

By characterising electricity distribution as a fiduciary function, the Court has elevated the standard of accountability expected from utilities. The ruling serves as a clear warning against arbitrary billing practices and strengthens the jurisprudence on fairness, reasonableness, and evidentiary discipline in regulatory governance.

Authored by Nivedita Bharadwaj, Partner  https://ksandk.com/people/nivedita-bhardwaj/