Auction purchaser not liable for previous owner's electricity dues

The Supreme Court held that the auction purchaser is not liable to pay the arrears of electricity dues of the previous owner. The Court emphasized that the purchaser applied for a fresh connection, not a transfer of the existing connection, and the dues were against the erstwhile company, not the premises. The Court affirmed the interpretation of relevant regulations and judicial precedents, ultimately dismissing the appeal and upholding the lower court decisions in favor of the auction purchaser.

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Issues Involved:
1. Liability of the auction purchaser to pay arrears of electricity dues of the previous owner.
2. Applicability of the Orissa Electricity Regulatory Commission Distribution (Conditions of Supply) Code, 2004.
3. Interpretation of Section 43 of the Electricity Act, 2003.
4. Relevant judicial precedents regarding electricity dues and auction purchases.

Detailed Analysis:

1. Liability of the Auction Purchaser to Pay Arrears of Electricity Dues of the Previous Owner:
The primary issue in this case is whether a company that purchased the property of another company under liquidation through auction is liable to pay the arrears of electricity dues outstanding against the erstwhile company. The Supreme Court held that the auction purchaser (respondent No. 1) is not liable to pay the arrears of electricity dues of the previous owner. The Court emphasized that the respondent No. 1 applied for a fresh connection and not for the transfer of the existing connection. The electricity dues were levied against the erstwhile company and not the premises.

2. Applicability of the Orissa Electricity Regulatory Commission Distribution (Conditions of Supply) Code, 2004:
The Court examined sub-clause 10(b) of Regulation 13 of the Electricity Supply Code, which states that the transfer of service connection shall not be effected unless the arrear charges pending against the previous occupier are cleared. The Court concluded that this provision is not applicable to the respondent No. 1, as it applied for a fresh service connection and not for the transfer of an existing connection. The Court affirmed that the interpretation of this clause by the learned single Judge and the Division Bench was correct, being reasonable, just, and fair.

3. Interpretation of Section 43 of the Electricity Act, 2003:
Section 43 of the Electricity Act, 2003 mandates that every distribution licensee shall, on an application by the owner or occupier of any premises, supply electricity to such premises within one month after receipt of the application. The Court reiterated that this provision casts a duty on the distribution licensee to supply electricity upon fulfilling necessary conditions such as installation of machinery and deposit of security. The Court found that the respondent No. 1 fulfilled these conditions and hence, the appellant (NESCO) was obligated to provide the electricity connection.

4. Relevant Judicial Precedents Regarding Electricity Dues and Auction Purchases:
The Court referred to several precedents, including:
- Isha Marbles vs. Bihar State Electricity Board (1995): The Court held that an auction purchaser cannot be called upon to clear the past arrears as a condition precedent to supply electricity.
- Paschimanchal Vidyut Vitran Nigam Ltd. vs. DVS Steels & Alloys Pvt. Ltd. (2009): The Court noted that a purchaser of premises cannot be foisted with the electricity dues of any previous occupant in the absence of any contract to the contrary.
- Ahmedabad Electricity Co. Ltd. vs. Gujarat Inns Pvt. Ltd. (2004): The Court held that in the case of a fresh connection, the auction-purchasers cannot be held liable for the arrears incurred by the previous owners.
- Haryana State Electricity Board vs. Hanuman Rice Mills (2010): The Court summarized that electricity arrears do not constitute a charge over the property, and a transferee of premises cannot be made liable for the dues of the previous owner/occupier unless statutory rules authorize such a demand.

Conclusion:
The Supreme Court dismissed the appeal, holding that the respondent No. 1, who purchased the premises under court auction sale from the Official Liquidator on "as is where is" and "whatever there is" basis, is not liable to pay the arrears of electricity dues of the previous owner. The Court agreed with the decisions of the learned single Judge and the Division Bench of the High Court, affirming that the request was for a fresh connection and not a transfer of the existing connection.

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