Court rules in favor of petitioner Private Limited Company in electricity connection dispute

The court ruled in favor of the petitioner, a Private Limited Company, in a case concerning the refusal of a new electricity connection and liability for outstanding electricity dues of a liquidated company. The court held that the petitioner was not liable for the previous owner's dues before the sale confirmation date, as per the sale deed. The court quashed the demand for payment of old dues, restrained the respondent from recovering them from the petitioner, and directed the respondent to recover the dues from the promoters of the liquidated company within a specified timeframe. The writ petition was allowed with costs.

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Issues Involved:

1. Refusal to grant permission for a new electricity connection.
2. Liability for outstanding electricity dues of the previous owner (Dhar Cement Limited).
3. Validity of the demand for payment of old dues from the petitioner.
4. Applicability of the M.P. State Electricity Regulatory Commission regulations.
5. Alternative remedy availability.
6. Legal precedents and their applicability.
7. Conduct of the respondent and its officers.

Detailed Analysis:

1. Refusal to Grant Permission for a New Electricity Connection:
The petitioner, a Private Limited Company, was denied permission for a new electricity connection by the respondent due to non-payment of electricity dues of Dhar Cement Limited, a company in liquidation. The petitioner had purchased the assets of the liquidated company and argued that they were not liable for the previous dues.

2. Liability for Outstanding Electricity Dues of the Previous Owner:
The petitioner contended that as per Clause 11 of the sale deed, they were only liable for dues arising from the date of sale confirmation (25.07.2017). The Official Liquidator confirmed this, stating that the dues would be adjudicated and settled as per Sections 529, 529-A, and 530 of the Companies Act, 1956.

3. Validity of the Demand for Payment of Old Dues from the Petitioner:
The respondent demanded payment of Rs. 1,98,62,418/- for old dues. The petitioner argued that these dues were not related to their consumption and should not be recovered from them. The court noted that the sale deed explicitly stated that the petitioner was not liable for dues prior to 25.07.2017, and the respondent had foregone their claim before the Company Judge based on an assurance from the promoter of Dhar Cement Limited.

4. Applicability of the M.P. State Electricity Regulatory Commission Regulations:
The respondent cited an amendment by the M.P. State Electricity Regulatory Commission, which allows refusal of new connections if previous dues are unpaid. However, the court found this regulation inapplicable as the respondent had abandoned their claim before the Company Judge and did not pursue it further.

5. Alternative Remedy Availability:
The respondent argued that the petitioner had an alternative remedy, but failed to specify the forum. The court held that in the peculiar facts and circumstances, the petitioner could not be denied relief on this ground.

6. Legal Precedents and Their Applicability:
The respondent relied on several judgments, including Isha Marbles v. Bihar State Electricity Board and others, to justify their demand. However, the court distinguished these cases, noting that the petitioner was not liable for dues prior to the sale confirmation date as per the sale deed and the respondent's abandonment of their claim before the Company Judge.

7. Conduct of the Respondent and Its Officers:
The court criticized the respondent for not objecting to the statement made by the promoter of Dhar Cement Limited and for not pursuing their claim further. The court ordered a fact-finding inquiry to determine why the respondent abandoned their claim and directed the Managing Director to take appropriate action against responsible officers.

Conclusion:
The court quashed the demand letter dated 10.07.2020 and restrained the respondent from recovering the dues of Dhar Cement Limited from the petitioner. The court also directed the respondent to take steps to recover the dues from the promoters of Dhar Cement Limited within six months and to complete the fact-finding inquiry within three months. The writ petition was allowed with costs.

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