Auction sale on an as-is basis with disclosed electricity arrears can leave the purchaser liable for statutory dues before supply.

An auction purchaser of a secured asset sold on an "as is where is, whatever there is and without recourse" basis, with specific disclosure of electricity arrears, can be required to clear the previous owner's electricity dues as a condition for supply. The Court treated the dues as statutory in character and held that clear notice in the auction terms, along with the exclusion of the authorised officer's liability, meant the purchaser took the property subject to those arrears. The sale deed did not extend any indemnity to electricity dues, and the distinction between reconnection and fresh connection did not alter the obligation under the applicable supply conditions.

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Issues: Whether an auction purchaser of a secured asset sold on an "as is where is, whatever there is and without recourse basis" with specific disclosure of electricity arrears can be made liable to clear the previous owner's electricity dues as a condition for supply of electricity.

Analysis: The auction notice specifically quantified outstanding electricity dues and expressly stated that the property was being sold on an "as is where is" basis, subject to statutory dues, while also disclaiming liability for electricity dues. The sale deed did not extend the indemnity to such dues. The dues under the electricity supply terms were treated as statutory in character and, where the sale notice puts the purchaser on clear notice of such arrears, the purchaser cannot avoid liability by relying on decisions dealing with sales that contained no such clause. The distinction between reconnection and fresh connection did not assist the respondent because the applicable supply conditions also covered transfer of service connection and clearance of dues.

Conclusion: The purchaser is liable to clear the previous owner's electricity dues and the demand raised by the electricity company is sustainable.

Ratio Decidendi: Where a secured asset is sold on an "as is where is" basis and the auction notice specifically discloses electricity arrears and excludes liability of the authorised officer, the auction purchaser takes the property subject to those statutory electricity dues and may be required to clear them before obtaining supply.

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