Auction purchaser liability for electricity arrears fails absent nexus with the defaulting consumer and statutory authorisation.

An auction purchaser of liquidation assets, with no nexus to the defaulting consumer, cannot be compelled to pay the erstwhile consumer's electricity arrears as a condition for a fresh connection; Section 56(1) and the Supply Code permit recovery only where the statutory basis and required nexus are established. Regulation 4.6.4 was read harmoniously with the parent statute and found constitutionally valid, as it operates in a distinct field and does not create an arbitrary classification. Parallel insolvency proceedings did not attract Section 10 CPC because the issues were not directly and substantially the same, so no stay of the writ petition was warranted.

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Issues: (i) Whether an auction purchaser of assets sold in liquidation could be compelled to clear the erstwhile consumer's electricity arrears as a pre-condition for a fresh electricity connection in the same premises; (ii) Whether Regulation 4.6.4 of the West Bengal Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2013 was ultra vires the Constitution or required reading down; (iii) Whether the writ petition should be stayed on the ground of parallel proceedings under Section 10 of the Code of Civil Procedure, 1908.

Issue (i): Whether an auction purchaser of assets sold in liquidation could be compelled to clear the erstwhile consumer's electricity arrears as a pre-condition for a fresh electricity connection in the same premises.

Analysis: Section 56(1) of the Electricity Act, 2003 permits discontinuance of supply only in relation to dues due from the consumer whose supply is sought to be continued or restored. Regulation 3.4.2 of the Supply Code applies to new and subsequent consumers and permits recovery of prior dues only where a nexus between the defaulting consumer and the new consumer is proved by the licensee. The petitioner purchased only assets in liquidation, had no nexus with the defaulting consumer, and sought a fresh connection as an innocent transferee. Electricity dues do not run with the property as a charge, and the licensee had not established the statutory precondition for demanding the old dues from the petitioner.

Conclusion: The demand for clearance of the borrower's outstanding electricity dues as a condition for a fresh connection was illegal and could not be sustained.

Issue (ii): Whether Regulation 4.6.4 of the West Bengal Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2013 was ultra vires the Constitution or required reading down.

Analysis: Regulation 4.6.4 and Regulation 3.4.2 operate in distinct fields, the former governing cases of deemed termination and the latter governing recovery from new and subsequent consumers where nexus is proved. Read harmoniously with the parent statute and the scheme of the Supply Code, Regulation 4.6.4 does not impose an arbitrary classification or violate constitutional guarantees. Since the regulation is capable of a constitutionally consistent construction, there was no occasion to strike it down or read it down.

Conclusion: Regulation 4.6.4 was held valid and not ultra vires.

Issue (iii): Whether the writ petition should be stayed on the ground of parallel proceedings under Section 10 of the Code of Civil Procedure, 1908.

Analysis: The proceedings before the insolvency forums concerned claims arising out of the corporate insolvency process, whereas the writ petition concerned the independent enforceability of the electricity authority's demand under the Electricity Act and the Supply Code. The issues were not directly and substantially the same, and the existence of the other proceedings did not bar exercise of writ jurisdiction.

Conclusion: No stay of the writ petition was warranted.

Final Conclusion: The petitioner was entitled to a fresh electricity connection without being burdened with the erstwhile consumer's arrears, and the impugned demand was set aside while the regulatory framework was upheld on its true construction.

Ratio Decidendi: An innocent auction purchaser of only the assets of a defaulting consumer, having no nexus with the prior default, cannot be made liable for the former consumer's electricity dues unless the governing regulation expressly and validly authorises such recovery on the facts proved by the licensee.

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