2006 (10) TMI 462 - SC - Indian Laws

SC Revokes HC Decision; Orders Rs. 25L Deposit for Power Supply Pending Reevaluation of Clause 21A Validity and Legal Framework.

Dakshin Haryana Bijli Vitran Nigam Ltd. Versus M/s. Paramount Polymers Pvt. Ltd.

Dakshin Haryana Bijli Vitran Nigam Ltd. Versus M/s. Paramount Polymers Pvt. Ltd. - 2007 AIR 2, 2006 (7) Suppl. SCR 635, 2006 (13) SCC 101, 2006 (9) JT ... Issues Involved:1. Liability of the purchaser for arrears of electricity charges owed by the previous owner.2. Validity and applicability of Clause 21A in the Terms and Conditions of Supply introduced on 27.11.2001.3. The impact of the Haryana Government Electrical Undertakings (Dues Recovery) Act, 1970 on the recovery of electricity dues.4. The relevance and application of the Supreme Court decision in M/s Isha Marbles Vs. Bihar State Electricity Board.Issue-wise Detailed Analysis:1. Liability of the Purchaser for Arrears of Electricity Charges Owed by the Previous Owner:The appellant, a distributing company, refused to provide a fresh electricity connection to the first respondent, who purchased an undertaking from M/s L.L.C. Steels Pvt. Ltd., unless the arrears owed by the previous owner were cleared. The first respondent argued that they should not be held liable for the previous owner's dues, relying on the Supreme Court's decision in M/s Isha Marbles Vs. Bihar State Electricity Board, which held that an auction purchaser could not be called upon to clear past arrears as a condition precedent for a fresh connection.2. Validity and Applicability of Clause 21A in the Terms and Conditions of Supply Introduced on 27.11.2001:The appellant introduced Clause 21A, which mandated that no fresh connection would be provided to a purchaser unless the outstanding dues of the previous consumer were cleared. The High Court did not address the validity of this clause but held that it could not apply retrospectively to the first respondent, who purchased the undertaking before the clause's introduction. The Supreme Court, however, found that Clause 21A(c) applied to existing consumers with outstanding dues and that the relevant date for applying the clause was the date of the fresh connection application (1.1.2002), not the date of purchase.3. The Impact of the Haryana Government Electrical Undertakings (Dues Recovery) Act, 1970 on the Recovery of Electricity Dues:The Supreme Court noted that the High Court failed to consider the Haryana Government Electrical Undertakings (Dues Recovery) Act, 1970, which allows for the recovery of electricity dues as arrears of land revenue. This Act provides the appellant with statutory authority to recover dues from the premises, even from a transferee, thus supporting the validity of Clause 21A.4. The Relevance and Application of the Supreme Court Decision in M/s Isha Marbles Vs. Bihar State Electricity Board:The Supreme Court distinguished the present case from Isha Marbles, noting that the latter did not involve a statutory provision like Clause 21A. The Court emphasized that the decision in Isha Marbles could not be used to invalidate Clause 21A, which was introduced under the statutory authority of Section 49 of the Electricity (Supply) Act. The Court also observed that the correctness of Isha Marbles was under reconsideration by a larger bench.Conclusion and Directions:The Supreme Court set aside the High Court's judgments and remitted the writ petition for fresh consideration. It directed the first respondent to deposit Rs. 25 lakhs as a condition for the continuance of the electricity supply, pending the High Court's decision. The Court provided detailed instructions on the handling of this deposit based on the High Court's eventual ruling on the validity of Clause 21A. The appeal was allowed, and the High Court was requested to expedite the writ petition's disposal.