A) ABSTRACT / HEADNOTE

The Supreme Court addressed the applicability of Section 56(2) of the Electricity Act, 2003 to demands arising under the repealed Electricity Act, 1910 and assessed whether a claim barred by delay under the 2003 Act could survive under earlier legislation. The case revolved around an agreement between the Madhya Pradesh Madhya Kshetra Vidyut Vitran Company Ltd. (appellants) and Bapuna Alcobrew Private Ltd. (respondents) over minimum guaranteed electricity charges, non-fulfillment of which led to repeated demands. Despite rulings affirming the liability to pay minimum charges under contractual obligations, delays and the legal framework under which claims were raised complicated enforceability. The Court resolved that liabilities accrued under the 1910 Act were not barred by Section 56(2) of the 2003 Act, which introduced a two-year limitation, confirming that liabilities continued under general principles and the Limitation Act, 1963. However, it rejected the respondent’s re-litigation on the same issues based on principles of issue estoppel and res judicata.

Keywords: Section 56(2), Electricity Act 2003, Limitation Act 1963, Minimum Guarantee Charges, Issue Estoppel.

B) CASE DETAILS

i) Judgment Cause Title:
Madhya Pradesh Madhya Kshetra Vidyut Vitran Company Limited & Ors. v. Bapuna Alcobrew Private Limited & Anr.

ii) Case Number:
Civil Appeal No. 1095 of 2013.

iii) Judgment Date:
November 4, 2024.

iv) Court:
Supreme Court of India.

v) Quorum:
Justices Dipankar Datta and Pankaj Mithal.

vi) Author:
Justice Dipankar Datta.

vii) Citation:
[2024] 11 S.C.R. 340.

viii) Legal Provisions Involved:

• Electricity Act, 2003, Section 56(2).
• Electricity Act, 1910, Section 24.
• Limitation Act, 1963, Sections 15, 17.
• General Clauses Act, 1897, Section 6.

ix) Judgments overruled by the Case (if any):
None explicitly overruled, but reliance on precedents clarified ambiguities.

x) Case is Related to which Law Subjects:
Commercial Law, Contractual Law, Statutory Interpretation, Electricity Regulations, Administrative Law.

C) INTRODUCTION AND BACKGROUND OF JUDGMENT

The dispute arose from an agreement between the appellants (electricity distributors) and the respondent (industrial consumer) over supply of electricity with a minimum guaranteed charge clause. Following alleged violations and changes in electricity generation policies, the appellants sought recovery of dues amounting to ₹70.5 lakhs, attributed to the respondent’s failure to meet minimum consumption levels. Initial legal challenges centered around interim orders requiring partial payment but escalated with the enactment of the Electricity Act, 2003, which introduced a two-year limitation period for recovery of electricity dues. The High Court quashed subsequent demands based on these new limitations, prompting this appeal.

D) FACTS OF THE CASE

1. Agreement Formation: The respondent entered a 1991 agreement with the appellants guaranteeing minimum electricity consumption.
2. Supplementary Agreements: Demand increases and agreements culminated in 1996 with provisions for a biogas turbo generator (TG set), restricted to standby use.
3. First Default: Allegations arose of improper parallel usage of the TG set. A show cause notice was issued in 2000, demanding ₹70.5 lakhs.
4. Initial Legal Proceedings: Interim orders required deposits for minimum guarantee charges, and subsequent rulings affirmed liabilities irrespective of consumption.
5. Policy Changes: By 2006, the respondent withdrew their first writ petition citing altered policy allowing unrestricted TG set operation.
6. Renewed Demands: In 2009, the appellants reiterated demands, but the respondent challenged these afresh, now invoking the limitation clause under the 2003 Act.
7. High Court’s Division Bench Ruling: The Division Bench found the demand barred by Section 56(2) of the 2003 Act.

E) LEGAL ISSUES RAISED

1. Does Section 56(2) of the Electricity Act, 2003, apply retrospectively to liabilities under the repealed Electricity Act, 1910?
2. Can the respondent escape liability under principles of limitation or delay?
3. Does the issue estoppel doctrine bar re-litigation of demands affirmed in prior proceedings?

F) PETITIONER/APPELLANT’S ARGUMENTS

1. Section 56(2) applies only to liabilities under the Electricity Act, 2003 and not retrospectively to dues accrued under the Electricity Act, 1910.
2. Liabilities under the 1910 Act were saved by Section 6 of the General Clauses Act, 1897, preserving rights and obligations.
3. High Court ignored binding principles of issue estoppel, preventing challenges already decided.
4. Delay in enforcement arose from judicial stay orders, and demands were validly quantified in 2009.

G) RESPONDENT’S ARGUMENTS

1. Demands made after nine years (1996–2000 period) were arbitrary, unjust, and unenforceable under any reasonable limitation framework.
2. The 2003 Act’s Section 56(2) expressly barred claims beyond two years.
3. Encashment of bank guarantees without due process violated natural justice.

H) JUDGMENT

a. Ratio Decidendi

1. Section 56(2) of the Electricity Act, 2003 applies prospectively, not to liabilities incurred before its enactment.
2. Section 24 of the Electricity Act, 1910, though lacking limitation provisions, operates in tandem with the Limitation Act, 1963, imposing a three-year limit on claims.
3. Repeated litigation of settled issues violated issue estoppel principles.

b. Obiter Dicta (if any)

1. Judicial discipline demands compliance with binding orders unless reversed or appealed.
2. While statutory silence on limitation does not preclude reasonable enforcement periods, facts dictate outcomes.

c. Guidelines

1. Statutory liabilities persist under repealed laws unless expressly extinguished.
2. Litigants must exhaust appeals against adverse orders instead of re-litigating identical issues.

I) CONCLUSION & COMMENTS

This decision underscores the importance of adhering to statutory and judicial timelines. It upholds enforceability of past liabilities under repealed laws, balancing principles of limitation with equitable delay consideration. The Court’s reliance on issue estoppel reinforces consistency in judicial outcomes, deterring duplicative litigation.

J) REFERENCES

a. Important Cases Referred

1. Kusumam Hotels Pvt. Ltd. v. Kerala SEB [(2008) 13 SCC 213].
2. K.C. Ninan v. Kerala SEB [(2023) SCC OnLine SC 663].
3. Hope Plantations Ltd. v. Taluk Land Board [(1999) 5 SCC 590].
4. Ajmer Vidyut Nigam Ltd. v. Rahamatullah Khan [(2020) 4 SCC 650].

b. Important Statutes Referred

1. Electricity Act, 2003 – Sections 56, 174, 185.
2. Electricity Act, 1910 – Section 24.
3. Limitation Act, 1963 – Sections 15, 17.
4. General Clauses Act, 1897 – Section 6.