Company court jurisdiction limited over post-sale electricity dues dispute and fresh connection conditions

A post-sale dispute between an auction purchaser and the electricity company over clearance of pre-liquidation dues fell outside company court jurisdiction under the winding up scheme. The court held that, because the utility was not asserting a claim against the company in liquidation and no distribution or priority issue under the Companies Act, 1956 arose, section 446(2) did not authorise clarification or modification of the sale orders. It further held that the condition requiring payment of outstanding arrears before a fresh or temporary electricity connection was a lawful supply condition that continued to apply. The applicant therefore could not obtain electricity connection without first satisfying the dues requirement.

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Issues: Whether the company court had jurisdiction to entertain the applicant's request for clarification or modification of the sale orders so as to relieve the auction purchaser from paying the outstanding pre-liquidation electricity dues, and whether the applicant was entitled to new or temporary electricity connection without first clearing those dues.

Analysis: The dispute arose after the sale had been completed and the applicant had become the owner of the property. The electricity company was not asserting a claim against the company in liquidation or seeking payment from the official liquidator under the winding up scheme; it was insisting on compliance with a lawful condition of supply imposed on an intending consumer before processing a fresh connection request. Such a controversy was held to be outside the scope of section 446(2) of the Companies Act, 1956, because it was not a claim by or against the company in liquidation and did not require adjudication of priorities under sections 529, 529A or 530. The court further held that the condition requiring clearance of previous arrears before grant of supply was legally valid and continued to operate, and that the pending or attempted claim before the consumer forum and the technical and financial prerequisites for supply also militated against the relief sought.

Conclusion: The company court had no jurisdiction to grant the declaration or directions sought, and the applicant was not entitled to electricity connection without complying with the outstanding dues requirement.

Final Conclusion: The application failed both on jurisdiction and on merits, and the reliefs sought by the applicant were declined.

Ratio Decidendi: A company court exercising winding up jurisdiction cannot adjudicate a post-sale dispute between an auction purchaser and a third-party utility over a lawful condition of supply, since such a matter is not a claim by or against the company in liquidation and lies outside the distribution and priority scheme of the Companies Act, 1956.

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