The Punjab and Haryana High Court has held that Chandigarh Power Distribution Limited (CPDL) cannot raise electricity bill demands from consumers for period before it officially took over the power supply system. The ruling came as Justice Jagmohan Bansal quashed a Rs 14.77 lakh assessment raised on the basis of an alleged billing error.
Coming down firmly on retrospective billing, the court ruled that such demands are “bad in the eye of law”. The controversy stemmed from an inspection carried out on November 17, 2025. The CPDL concluded that an incorrect multiplication factor had been applied in earlier bills, resulting in short payment. A revised demand was consequently issued.
But the consumers challenged not just the calculation—but the authority.
No authority to go into the past
The matter was brought to Justice Bansal’s notice after city residents, holding non-residential electricity connection, sought the setting aside of assessment order dated December 10, 2025, whereby their objections were rejected and Rs.14,77,823 was demanded.
The case turned on Chandigarh’s electricity privatization framework. While CPDL was incorporated in April 2022, the actual transfer of assets, liabilities and operations from the UT Administration took place only through a notification dated January 31, 2025.
Justice Bansal held that the date was decisive. “The Administration has not transferred right to respondent-company to raise demand for the period prior to transfer date, thus, demand raised prior to transfer date by respondent is bad in the eye of law.”
Court rejects CPDL’s reliance on ‘liabilities’ clause
CPDL argued that under the transfer scheme, it inherited “liabilities”, including those arising from past consumer transactions. Justice Bansal dismantled the argument, drawing a clear distinction between what a company owes and what it can recover. “Expression ‘liabilities’ covers liabilities of the company and does not cover liabilities of the consumer. The petitioners are consumers,” the court observed
Explaining the concept in practical terms, Justice Bansal added: “There may be a consumer who has not
utilized electricity, however, invoice was raised. At a later stage, it is established that consumer was not liable to pay amount depicted in the invoice. The company would be liable to refund the said amount”.
Justice Bansal described this as contingent liability which might arise in future. “There is fundamental difference between assets and liabilities. The demand from consumer is ‘contingent or current asset’ of the company whereas amount payable to consumers is ‘current’ or contingent liability,” the Bench observed
No ‘asset’ to recover from past period
The court also examined whether past dues could be treated as “assets” transferred to CPDL. The answer again went against the company. “In the definition of ‘assets’, amount which may be recoverable from consumer with respect to electricity supplied before the transfer date has not been included.”
Statute also silent on retrospective recovery
Justice Bansal ruled that even the governing legal framework did not permit such recovery unless specifically provided. “Section 131 of the Electricity Act (empowering State government or board to transfer property, interest in property, rights and liabilities to a company) does not provide for transfer of right to initiate recovery proceedings with respect to past period.”
Justice Bansal added the transfer scheme was notified in terms of Section 131. “It did not provide for transfer of right to initiate recovery proceedings with respect to past period. The respondent is relying upon scheme and scheme does not empower respondent to initiate recovery proceedings with respect to past period”.
Why this matters for Chandigarh consumers
The ruling addresses a recurring concern in Chandigarh after power distribution shifted to CPDL—whether old bills can be recalculated and large demands raised later. It enforces that corporatization does not automatically transfer unlimited recovery powers. Past billing disputes cannot be reopened arbitrarily
Legal backing must exist before raising retrospective demands
