Sanctioned rehabilitation scheme prevails over inconsistent electricity dues conditions and protects entitlement to fresh supply.

A sanctioned rehabilitation scheme under special sickness legislation can bind an electricity distribution licensee where the scheme contains an overriding clause and specifically addresses electricity dues. In that setting, an objection that the licensee was not formally a party is treated as technical if the scheme has already been acted upon and the licensee had an opportunity to challenge it. Inconsistent supply conditions requiring clearance of past dues before a fresh connection cannot prevail over the scheme, and the special sickness law operates as the governing special law for revival and rehabilitation. The practical effect is that supply to the auction purchaser cannot be denied on the basis of earlier electricity arrears.

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Issues: (i) whether the rehabilitation scheme framed under the special sickness legislation bound the electricity distribution licensee and could be enforced despite its objection that it was not a party to the scheme; and (ii) whether the condition requiring clearance of earlier electricity dues before grant of a fresh connection, and the electricity law relied upon for that purpose, could override the rehabilitation scheme and bar supply to the auction purchaser.

Issue (i): whether the rehabilitation scheme framed under the special sickness legislation bound the electricity distribution licensee and could be enforced despite its objection that it was not a party to the scheme.

Analysis: The scheme had been acted upon by the authorities and the State had earlier pursued challenges to it, including appellate proceedings and writ proceedings. The scheme itself contained an overriding clause and specifically dealt with electricity dues. The distribution licensee had also been given an opportunity to challenge the scheme but did not do so. In that background, the objection that the scheme was not binding because the licensee was not formally a party was treated as technical and unsustainable.

Conclusion: The scheme was binding on the appellant and could be relied upon by the respondent.

Issue (ii): whether the condition requiring clearance of earlier electricity dues before grant of a fresh connection, and the electricity law relied upon for that purpose, could override the rehabilitation scheme and bar supply to the auction purchaser.

Analysis: The Court held that the special sickness legislation, together with the sanctioned scheme, had overriding effect and prevailed over inconsistent electricity supply conditions. Clause 2(j) of the supply conditions, even if generally saved by the later electricity enactment in the abstract, could not defeat the scheme in the facts of the case. The Court also noted that the electricity law conditions relied upon by the appellant did not carry an overriding clause comparable to the scheme and that the subsequent regulatory provision and later decisions did not assist the appellant. In the overall statutory comparison, the sickness legislation operated as the special law for the revival and rehabilitation of the sick industrial company.

Conclusion: The appellant could not insist on earlier dues as a precondition to supply, and the electricity connection could not be refused on that basis.

Final Conclusion: The appeal failed on both principal issues, and the order granting relief to the respondent was left undisturbed.

Ratio Decidendi: Where a sanctioned rehabilitation scheme under the special sickness legislation contains an overriding clause and regulates electricity dues, inconsistent supply conditions cannot be invoked to defeat the scheme or to deny a fresh electricity connection to the person entitled under it.

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