This civil appeal arises from a judgment of the High Court of Judicature at Allahabad (Lucknow Bench), which had dismissed the distribution licensee’s challenge to an order by the Electricity Ombudsman setting aside a multi-million-rupee demand for Minimum Consumption Guarantee Charges (MCGC). The Supreme Court evaluated whether a distribution company can raise and recover delayed electricity charges and exercise statutory disconnection rights for unbilled amounts dating back nearly a decade, in light of Section 56(2) of the Electricity Act, 2003.
- Trigger Point for “First Due” Charges: Electricity consumption charges or guarantee charges become “first due” only after a formal bill quantifying the amount is issued to the consumer, even though the underlying liability to pay may arise upon the availability or consumption of electricity.
- Limitation on Disconnection Rights: Under Section 56(2) of the Electricity Act, 2003, a distribution licensee is barred from disconnecting electricity supply for non-payment of dues after the expiry of a two-year period from when the charges first became due, unless such sum has been shown continuously as recoverable arrears in past bills.
- Recovery of Supplementary Demands: While Section 56(2) restricts the harsh penal measure of disconnecting power supply after two years, it does not completely bar a licensee from pursuing alternative modes of recovery for supplementary demands, though stale demands remain subject to general laws of limitation.
- Requirement of Consumer Consent and Load Release: A consumer’s financial liability for additional contracted load only arises when the agreed quantum of electricity is effectively released and made available by the distribution licensee, rather than merely from the date of an unaccepted offer or unfulfilled readiness.
- Final Verdict: The Supreme Court dismissed the appeal, affirming the High Court’s findings that the 2007 demand for 1998 charges was barred under limitation principles and could not be sustained or backed by coercive disconnection.
2026 INSC 985
Dakshinanchal Vidyut Vitran Nigam Ltd. v. Vidyut Lokpal, Uttar Pradesh and Others (D.O.J. 10.09.2026)



