TaxTMI 
TaxTMI 
2023 (5) TMI 1251
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....Hemantika Wahi, AOR, Srishti Khindaria, Adv., Ruby Singh Ahuja, Praveen Chaturvedi, Chirag M. Shroff, Ashok Mathur, Manik Karanjawala, Raj Singh Rana, Purvish Jitendra Malkan, Rameshwar Prasad Goyal, AORs, M.Y. Deshmukh, Adviteeya Sharma, Manjeet Kirpal, Nandkumar Deshmukh, Advs., Ramesh Lal Bhatia, AOR, D.N. Ray, Dillip Kumar Nayak, Disha Ray, Advs., Sumita Ray, Shivaji M. Jadhav, AORs, Brij Kishor Sah, Adarsh Kumar Pandey, Apurva, R.B. Phookan, Neha Tandon, Advs., Shailesh Madiyal, AOR, P.S. Patwalia, Sr. Adv., Bansuri Swaraj, Siddhesh Kotwal, Ana Upadhyay, Manya Hasija, Nihar Dharmadhikari, Md. Sontu Mia, Advs., Nirnimesh Dube, Ram Lal Roy, Sharmila Upadhyay, AORs, Ap & J Chambers, Abhijeet Sinha, Jatin Zaveri, Romy Chacko, AORs, Prashant Kumar, Robin V.S., Advs., P.N. Gupta, P.V. Dinesh, AORs, Raghenth Basant, Nida K., Akhil K.M., Advs., P.V. Yogeswaran, AOR, Amar Dave, Adv., P.S. Sudheer, AOR, Rishi Maheshwari, Anne Mathew, Bharat Sood, Advs., Sneha Kalita, AOR, Ravindra Kumar, Sr. Adv. and Divya Roy, AOR JUDGMENT Dr. D.Y. Chandrachud, C.J.I. Table of Contents A. Overview B. Regulatory Regime C. The position in law D. Issues E. Submissions F. Analysi....
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....nd use of electrical energy in India. The 1910 Act prescribed the legal framework for laying down cables and other works related to the supply of electricity. It also laid down a legal framework for supply of electrical energy and imposed certain responsibilities and obligations on persons licensed to supply electricity with a view to incentivise the growth of the electricity industry through private licensees. 5. Section 2(c) of the 1910 Act defined "consumer" as any person supplied with energy by a licensee or any other person engaged in the business of supplying energy to the public under the Act, and included any person whose premises were for the time being connected for the purposes of receiving energy. Section 21(2) empowered a licensee to make conditions to regulate their relations with persons who were or intend to become consumers. Section 22 obligated a licensee to supply electrical energy, on application, to every person within the area of supply on the same terms as those on which any other person in the same area was entitled. Section 24 empowered the licensee to disconnect the supply of electricity if any person neglected to pay any charge or sum for energy due to....
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....tory responsibilities from government to the regulatory commissions, delicensing of electricity generation, promotion of captive generation, and encouraging open access transmission. Section 2(15) of the 2003 Act defines 'consumer' in terms similar to Section 2(c) of the 1910 Act. Part VI of the 2003 Act deals with distribution of electricity. Section 43 casts a Universal Service Obligation "USO"on the distribution licensee to provide supply of electricity to the premises of an owner or occupier. The State Commission has been empowered Under Section 50 to specify an Electricity Supply Code to provide among other things for the recovery of electricity charges, intervals for billing of electricity charges and disconnection of supply of electricity for non-payment. Under Section 56, the generating company or distribution licensee, as the case may be, may disconnect electricity supply of any person who neglects to pay any charge or sum for electricity. Section 181(2)(x) provides that the State Commission may make Regulations inter alia providing for, the Electricity Supply Code Under Section 50. 10. In light of the provisions contained in the 1910 Act, 1948 Act, and 2003 Act....
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....n 2010 to provide that the distribution licensee need not entertain an application for reconnection or a new connection unless any dues relating to those premises are cleared. 14. In Assam, the Assam Electricity Regulatory Commission "AERC" framed the Assam Electricity Regulatory Commission (Electricity Supply Code and Related Matters) Regulations, 2004. "AERC Supply Code" Clause 3.6 dealing with the requisition of electricity supply requires a person occupying a new premises to ensure that all the outstanding electricity dues are duly paid up and discharged. 15. In West Bengal, the West Bengal Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2012 "WB Electricity Supply Code" have been notified under the 2003 Act. Clause 3.4.2 of the said Regulations empowers the licensee to recover the dues of a previous consumer in respect of the premises from a new consumer only if there is a nexus between the previous consumer and the new consumer. 16. The subsequent owners or occupiers of the premises challenged the Conditions of Supply and Electricity Supply Codes enacted by the Electric Utilities before the respective High Courts when they were called upon to....
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....ch decisions have taken note of specific statutory Regulations enabling recovery of dues from subsequent purchasers. In the process, this Court distinguished Isha Marbles (supra), where the Court had no occasion to consider similar provisions. In Dakshin Haryana Bijli Vitran Nigam Ltd. v. M/s. Paramount Polymers Pvt. Ltd. AIR 2007 SC 2, this Court was dealing with Clause 21A of the relevant Conditions of Supply, which entitled a licensee to demand payment of outstanding dues from a transferee if they desired a service connection. It was held that Isha Marbles (supra) cannot be applied to strike down Clause 21A as the Court in that case had no occasion to consider the effect of a similar clause. The matter was remitted back to the High Court for a fresh decision since it had not adjudicated on the implication of Clause 21A of the Conditions of Supply. 21. In Paschimanchal Vidyut Vitran Nigam Limited v. DVS Steels and Alloys Private Limited (2009) 1 SCC 210, this Court observed that a licensee or an electricity distributor can insist upon fulfilment of statutory rules, Regulations or the conditions of supply so long as they are not arbitrary and unreasonable. It was further held t....
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.... to enable the recovery of arrears of the previous owner or occupier from an auction-purchaser can be provided through subordinate legislation by the State Commissions; e. Whether the 1910 Act, 1948 Act, and the 2003 Act have express provisions enabling the creation of a charge or encumbrance over the premises; f. Whether the statutory bar on recovery of electricity dues after the limitation of two years provided Under Section 56(2) of the 2003 Act, will have an implication on civil remedies of the Electric Utilities to recover such arrears; and g. What is the implication of an auction-sale of premises on "as is where is" basis, with or without reference to electricity arrears of the premises? E. Submissions 24. To put the above-mentioned issues in their proper context, we refer to the broad legal submission adduced before us by the parties. I. Electric Utilities 25. Sarvashri M.G. Ramachandran, Mr. Ranjit Kumar, Mr. Vijay Hansaria, Mr. Ajit Bhasme, learned Senior Counsel appearing for Electric Utilities have made the following submissions: a. USO is not absolute i. (i) The duty of the licensee to supply electricity Under Sec....
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.... i. Section 49 of the 1948 Act empowers the Electricity Board to supply electricity upon such terms and conditions as the Board thinks fit. Under Section 79 of the 1948 Act, the Board can make Regulations not inconsistent with the Act and the Rules made thereunder. In Hyderabad Vanaspathi (supra) this Court held that terms and conditions of supply framed by the Electricity Board Under Section 49 of the 1948 Act are statutory in character; ii. The terms and conditions of supply under the 2003 Act are framed by independent regulators in terms of Section 50 read with Section 181(2)(x) of the 2003 Act after following a detailed procedure. Therefore, the Electricity Supply Code framed by the State Commission is a subordinate legislation and has a statutory character. This statutory authority enables the Supply Code to provide for recovery of dues of the previous owner from the subsequent owner; and iii. The condition of payment of outstanding dues is not a compulsory extraction of money and does not require a primary legislation by Parliament or state legislature. Such a condition can be prescribed by a subordinate legislation. d. Electricity arrears as charge....
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....i. (i) Electricity constitutes goods within the meaning of Entries 53, 54, and 56 of List II of the Seventh Schedule of the Constitution and under the Sale of Goods Act 1930; ii. (ii) The obligation to provide electricity to consumers Under Section 43 of the 2003 Act is not hedged by a condition to discharge the arrears incurred by the previous consumer; iii. (iii) The phrase "price as determined by the appropriate commission" in Section 43(2) of the 2003 Act could only be the price at which electricity is supplied to the distribution licensee. Thus, 'price' Under Section 43 cannot include the arrears of the previous consumer; (iv) The payment of necessary "charges" and "other compliances" contemplated Under Section 43 relates to the application fees, and cannot be stretched to include a power to require the payment of third-party arrears; (v) The statutory duty of a licensee to supply power on an application by the owner or occupier of any premises within one month is contained in Section 43(1) of the 2003 Act. The only exception to this statutory obligation is provided by Section 44 where the licensee is prevented from giving supply due....
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....y unfair. The arrears are due to a default committed by a previous consumer and the negligence of the Electric Utilities which continued to supply electricity despite default, without resorting to its power of disconnection. d. Subordinate Legislation a. The liability of one person, whether statutory or contractual, cannot be enforced against another person unless there is a substantive provision in law to do so. Such enforcement of liability cannot be provided by a piece of delegated legislation; b. Even if it is assumed that such liability can be enforced by a delegated legislation, the parent law must clearly prescribe the power of framing such a piece of legislation. Neither the 1910 Act nor the 1948 Act provides any specific provision empowering the Electricity Board to recover the electricity dues of the previous owner or occupier of the premises from the new owner or occupier of premises in question; c. The scheme of the 2003 Act, from Sections 43 to 49, makes it evident that no specific power has been conferred upon the State Commission Under Section 50 read with Section 181 of the 2003 Act or with the State Under Section 180 of the 2003 ....
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....on "as is where is" basis (i) A condition such as "as is where is and whatever there is" is a feature of physical properties and does not extend to claims that are not charges, mortgages, or other encumbrances running with the land; and (ii) There was no obligation on the applicants to ascertain the electricity dues and more so in view of the judgment in Isha Marbles (supra), which held the field then, and which continues to hold the field in all cases where there is no statutory imposition of liability for past dues of previous owners on subsequent purchasers. F. Analysis I. Universal Service Obligation is not absolute 27. The Electric Utilities have argued that the duty to supply electricity Under Section 43 of the 2003 Act is not absolute. It has been submitted that Under Section 43, an applicant has to fulfil the obligation to pay the 'price' as determined by the State Commission to become entitled to receive supply of electricity. The 'price', it is urged, includes application fees as well as arrears of unpaid electricity dues of the previous owner or occupier. The Electric Utilities argue that in case there are outstanding dues of th....
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....ication by the owner or occupier of any premises, give supply of electricity to such premises, within one month after receipt of the application requiring such supply: *** Explanation - For the purposes of this Sub-section, "application" means application complete in all respects in the appropriate form, as required by the distribution licensee, along with the documents showing payment of necessary charges and other compliances. (2) It shall be the duty of every distribution licensee to provide, if required, electric plant or electric line for giving electric supply to the premises specified in Sub-section (1): Provided that no person shall be entitled to demand, or to continue to receive, from a licensee a supply of electricity for any premises having a separate supply unless he has agreed with the licensee to pay to him such price as determined by the Appropriate Commission. (emphasis supplied) 31. According to Section 43, the distribution licensee is obligated to supply electricity to the premises of an owner or occupier within a month of the receipt of an application requiring such supply. The provision casts a duty on the distribution ....
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....equire security - (1) Subject to the provisions of this section, a distribution licensee may require any person, who requires a supply of electricity in pursuance of Section 43, to give him reasonable security, as may be determined by Regulations, for the payment to him of all monies which may become due to him - (a) in respect of the electricity supplied to such person; or (b) where any electricity line or electrical plant or electric meter is to be provided for supplying electricity to such person, in respect of the provision of such line or plant or meter, And if that person fails to give such security, the distribution licensee may, if he thinks fit, refuse to give the supply of electricity or to provide the line or plant or meter for the period during which the failure continues. (emphasis supplied) 34. Section 47 indicates that a distribution licensee can refuse to supply electricity Under Section 43 if the applicant fails to furnish the requisite security. Under Section 48, a distribution licensee may require the applicant, who requires a supply of electricity in pursuance of Section 43, to accept (i) any restrictions which may be imposed for....
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....rears of the previous owner or occupier of the premises is also a 'price' determined by the State Commission and payable at the time of making an application for the supply of electricity. 38. The words "price", "tariff", or "charges" have not been defined in the 1910 Act or the 2003 Act. In AP TRANSCO v. Sai Renewable Power (P) Ltd. (2011) 11 SCC 34, this Court observed that the term "tariff" has neither been defined nor explained in the 2003 Act. The Court held that in the absence of any specific definition in the legislation, recourse has to be taken to the "meaning attached to these expressions under the general law or in common parlance." (2011) 11 SCC 34 39. In BSES Ltd. v. Tata Power Co. Ltd. (2004) 1 SCC 195, a two-judge Bench of this Court interpreted 'tariff' in the context of the Electricity Regulatory Commissions Act, 1998. It observed: 16. The word "tariff" has not been defined in the Act. "Tariff" is a cartel of commerce and normally it is a book of rates. It will mean a Schedule of standard prices or charges provided to the category or categories of customers specified in the tariff. 40. The proviso to Section 43(2) further refers to....
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....urt in State of AP v. National Thermal Power Corporation Ltd. (2002) 5 SCC 203, paragraph 20 In Paschimanchal Vidyut Vitaran Nigam (supra) a two-judge bench of this Court held that the supply of electricity to a consumer is a sale of goods. The charges paid by the consumer to the distribution licensee is essentially the price paid for goods supplied and consumed. The consumption of electricity by a consumer is always effected through equipment or appliances installed within the premises. 45. Section 2(15) of the 2003 Act defines the expression 'consumer' as follows: (15) "consumer" means any person who is supplied with electricity for his own use by a licensee or the Government or by any other person engaged in the business of supplying electricity to the public under this Act or any other law for the time being in force and includes any person whose premises are for the time being connected for the purpose of receiving electricity with the works of a licensee, the Government or such other person, as the case may be; (emphasis supplied) 46. The definition of "consumer" Under Section 2(15) of the 2003 Act is similar to the definition of "consumer" in the 19....
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.... electricity to premises, irrespective of a change in the owner or occupier. The 2003 Act provides an inclusive definition of 'premises' Under Section 2(51). According to the definition, premises include land, building, or structure. The second limb goes only so far as to say that when electricity is supplied to any person at a particular land, building, or structure, such person will continue to remain a consumer, even though they are not consuming electricity, so long as the electricity connection exists. The expression 'premises' used in the second limb identifies the place where the supply of electricity has to be made. 49. It would be material to refer to some other definitions under the 2003 Act which emphasise that supply of electricity is with respect to consumer: 2. Definitions.-In this Act, unless the context otherwise requires,- *** (17) "distribution licensee" means a licensee authorised to operate and maintain a distribution system for supplying electricity to the consumers in his area of supply; *** (19) "distribution system" means the system of wires and associated facilities between the delivery points on the tr....
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....about supply of electricity to premises. However, the use of such phrases is borne out of the practical consideration of supply of electricity. Unlike other goods, a distribution licensee cannot insist that the consumer come to their factory or warehouse to receive the supply of electricity. The distribution licensee necessarily has to lay down special infrastructure such as electricity lines and transformers to transmit electricity and supply it directly to the consumer, at their premises. On an application, the distribution licensee is statutorily obliged to supply electricity to the consumer. Consequently, the place where the supply of electricity is to be made has to be necessarily identified. Thus, Section 43 and 44 refer to the consumer's premises to fix the situs for the purpose of supplying electricity. 54. Section 56 provides that it is the liability of the consumer to pay the charge for electricity in respect of the supply of electricity. Under Section 56 the duty of effecting the payment of charges for electricity is on a person, that is, the consumer. Further, Section 56(2) specifically contains the expression "no sum due from any consumer". Section 126 also uses....
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....ty connection as a new connection it cannot be regarded as a new connection. It is only a reconnection since the premises had already been supplied with electrical energy. Such a supply had been disconnected owing to the default of the consumer. That consumer had bound himself to the Board to pay the dues. He also agreed to abide by the condition as stipulated in the Act and the Rules including the payment of the dues. (emphasis supplied) 58. This Court further went on to hold that a distribution licensee cannot make the auction-purchaser liable when seeking reconnection of electricity supply for the same premises. According to the Court, this was not feasible considering the fact that "with change of every ownership new connections have to be issued [which] does not appear to be the correct line of approach as such situation is brought by the inaction of the Electricity Board in not recovering the arrears as and when they fall due or not providing itself by adequate deposits." However, this Court also conceded that liability of previous owners could be fastened on auction-purchasers if the law so prescribed. 59. In Gujarat Inns (supra), another three-judge Bench of this C....
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....cted. 61. We need to highlight that the 2003 Act contemplates a synergy between the consumer and premises. Under Section 43 of the 2003 Act, the owner or occupier of premises can seek a supply of electricity for particular premises. Perforce, when electricity is supplied, the owner or occupier becomes a consumer only with respect to those particular premises for which electricity is sought and provided. For example, when a person owning an apartment in a residential complex applies for supply of electricity to such an apartment, they become a consumer only with respect to the apartment for which the application is made and to which electricity is supplied. Such a person may own another apartment to which electricity may already be supplied, but they will be considered a separate consumer with respect to the second apartment. For an application to be considered as a 'reconnection', the applicant has to seek supply of electricity with respect to the same premises for which electricity was already provided. Even if the consumer is the same, but the premises are different, it will be considered as a fresh connection and not a reconnection. 62. In Gujarat Inns. (supra), th....
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....and obligations of a licensee under the 1910 Act. The first proviso specified that certain provisions of the 1910 Act relating to the duties and obligations of a licensee shall not be applicable to the Board. In its decision in State of Uttar Pradesh v. Hindustan Aluminium Corporation (1979) 3 SCC 229 this Court analysed the interconnection between Section 26 of the 1948 Act and Section 22 of the 1910 Act. The court held that the obligation Under Section 22 of the 1910 Act to supply energy to every person within the area of supply is not fastened to the Board. Although Clause VI of Schedule to the 1910 Act also mandates the licensee to supply electricity on demand, the second proviso specifies that the said Clause is applicable to the Board only when the distribution mains have been laid by the Board and the supply through any of them has commenced. 67. Under Section 21 of the 1910 Act, the Supply Licensee prescribed conditions with the previous sanction of the state government. Similarly, the Boards could also prescribe conditions Under Section 21 of the 1910 Act by virtue of Section 26 of the 1948 Act. 68. Section 49 of the 1948 Act read as follows: 49. Provisions ....
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....C 686, a two-judge Bench of this Court held that the terms and conditions on which the Board supplies electricity to a consumer have a statutory character. 70. In Ferro Alloys Corporation Ltd. v. A.P. State Electricity Board 1993 Supp (4) SCC 136 a two-judge Bench of this Court upheld the validity of Section 49 of the 1948 Act. The Court observed that the terms and conditions notified Under Section 49 must relate to the object and purpose for which they were issued. There, the Court upheld the authority of the Board to prescribe a security deposit in the following terms: 102. [...] Under the Regulations framed by the Board in exercise of powers of Section 49 read with Section 79(j) the consumer is only entitled and the Board has an obligation to supply energy to the consumer upon such terms and conditions as laid down in the Regulations. If, therefore, the Regulations prescribed a security deposit that will have to be complied with. It also requires to be noticed under Clause VI of the Schedule to the Electricity Act that the requisition for supply of energy by the Board is to be made under proviso (a) after a written contract is duly executed with sufficient security. ....
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....of the Conditions of Supply notified by the Electricity Boards. Significantly, the decision in Hyderabad Vanaspati Ltd. (supra) holds that the power of the Board to formulate terms and conditions Under Section 49 of the 1948 Act is distinct from the power to make Regulations embodied Under Section 79 of the said Act. Therefore, the terms and conditions of supply notified by the Board Under Section 49, although in the nature of subordinate legislation, were not required to be placed before the State Legislature Under Section 79A of the 1948 Act. In that case, it was also held that statutory conditions could be invalidated only if they were in conflict with any provisions of the 1948 Act or the Constitution. 73. The auction-purchasers have referred to India Thermal Power Ltd. v. State of MP (2000) 3 SCC 379 to argue that the conditions of supply are not statutory, but form a part of the contract between the Electricity Board and the consumer. Hence, it was submitted that these contractual terms cannot be enforced by the Board against the new owner or occupier of the premises. In India Thermal Power Ltd. (supra), the issue before the two-judge Bench was whether the State Government....
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.... character. When such a condition is incorporated as part of a contract, such contract also attains a statutory character and the liability contained therein becomes a statutory liability, which can be enforced by the utilities against third parties, including the new owners of the premises in question. 75. The next question that comes up for consideration is whether the Electric utilities can enact a condition providing for recoupment of electricity arrears of a previous owner from the new owner. Under the 1948 Act, the Board could enact terms and conditions for the supply of electricity Under Section 49 read with Section 79(j). This Court has held on many occasions that the term 'regulate' is to be given a wide interpretation allowing the performance of everything necessary for the organised implementation, development, and conduct of business. In Deepak Theatre v. State of Punjab 1992 Supp (1) SCC 684 a three-judge Bench of the Supreme Court held that the power to regulate implies the power to prescribe and enforce all such proper and reasonable Rules necessary for conduct of business. It was held: 3. It is settled law that the Rules validly made under the Ac....
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....Mills, Dhanauri (2010) 9 SCC 145, while summarising the position of law laid down in Paramount Polymers (supra) and Paschimanchal Vidyut Vitran Nigam Ltd. (supra), observed that the supplier can recover the arrears of electricity dues of the previous owner or occupier from the purchaser of the property if the statutory Rules or terms and conditions of supply which are statutory in character authorise the same: 12. The position therefore may be summarised thus: (i) Electricity arrears do not constitute a charge over the property. Therefore in general law, a transferee of a premises cannot be made liable for the dues of the previous owner/occupier. (ii) Where the statutory Rules or terms and conditions of supply which are statutory in character, authorise the supplier of electricity to demand from the purchaser of a property claiming reconnection or fresh connection of electricity, the arrears due by the previous owner/occupier in regard to supply of electricity to such premises, the supplier can recover the arrears from a purchaser. (emphasis supplied) 78. In Paramount Polymers (supra), a two-judge Bench of this Court was called upon to decide the va....
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....shall specify an Electricity Supply Code. Section 2(64) defines "State Commission" as the State Electricity Regulatory Commission constituted Under Section 82(1). The State Commission is authorised to notify the Electric Supply Code Under Section 181(2)(x). The use of expressions such as "recovery of electricity charges", "disconnection of supply", "restoration of supply", Under Section 50 indicate that the scope of the regulatory powers of the State Commission under the said provision is wide enough to govern all matters relating to the supply of electricity to the premises. 82. The 2003 Act lays down the legislative framework for generation, transmission, distribution, trading, and use of electricity in India. In the process, the Parliament has also conferred discretion on the regulatory authorities, particularly the Central Commission and State Commission, to work out further details within the framework of the legislative policy laid down in the legislation. While making subordinate legislation, the delegated authority has to act within the confines of the plenary legislation. JK Industries Ltd. v. Union of India, (2007) 13 SCC 673 The Rules or Regulations enacted by the Cen....
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....owners from new or subsequent owners. 85. In Paschimanchal Vidyut Vitran Nigam (supra), a two-judge Bench was considering the legality of the actions of the Appellant licensee to recover electricity dues from the purchaser of subdivided plots. Clause 4.3 of the Uttar Pradesh Electricity Supply Code stipulated that a new connection to subdivided premises shall be given only after the share of the outstanding dues attributed to such premises is duly paid by the applicant. This Court held that a distribution licensee can stipulate such terms necessary for supply of electricity, including that the arrears due in regard to the supply of electricity made to the premises when they were in the occupation of the previous owner or occupant, should be cleared before the electricity supply is restored or a fresh connection is provided to the premises. Therefore, a condition enabling the distribution licensee to insist on the clearance of the arrears of electricity dues of the previous consumer before resuming electricity supply to the premises is valid and permissible under the scheme of the 2003 Act. 86. The next question that arises for consideration is whether a Regulation providing f....
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....icity supplied to the premises should be cleared before electricity supply is restored or a new connection is given to a premises, cannot be termed as unreasonable or arbitrary. In the absence of such a stipulation, an unscrupulous consumer may commit defaults with impunity, and when the electricity supply is disconnected for non-payment, may sell away the property and move on to another property, thereby making it difficult, if not impossible for the distributor to recover the dues. Having regard to the very large number of consumers of electricity and the frequent moving or translocating of industrial, commercial and residential establishments, provisions similar to Clauses 4.3(g) and (h) of the Electricity Supply Code are necessary to safeguard the interests of the distributor. (emphasis supplied) 89. Electricity constitutes a public good. The Court's interpretation of the law must foster this position. In Hyderabad Vanaspati (supra) this Court was adjudicating upon the validity of Clause 39 of the Conditions of Supply which defined various malpractices and provided for enquiries by designated officials. This Court observed that it was the statutory duty of the Board t....
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....e or encumbrance over the premises. An ancillary issue is whether such arrears can become a charge on the property only through an express provision of law. Before we embark upon our analysis, we clarify that it is unnecessary to deal with the submission of the auction purchasers regarding registration Under Section 17 of the Indian Registration Act 1908 for the conditions of supply contained in a contract to constitute a charge. The decision of this Court in M.L. Abdul Jabbar Sahib v. M.V. Venkata Sastri & Sons (1969) 1 SCC 573, was limited to the extent that it holds that a charge created by an act of parties Under Section 100 of the Transfer of Property Act 1882 does not attract the provisions of Section 59 of the Indian Registration Act 1908. 93. The contention of the auction purchasers is that arrears of electricity are not a charge on property as they do not run with the land. They have relied on the decision in Ahmedabad Municipal Corporation v. Haji Abdulgafur Haji Hussenbha (1971) 1 SCC 757 to submit that enforcement of a charge against the property in the hands of a transferee for value without notice of the charge does not arise, and electricity dues are simply an uns....
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....It provides that a charge cannot be enforced against a property in the hands of a transferee without notice. The words "save as otherwise expressly provided by any law for the time being in force" indicate that a charge can be enforced against a transferee without notice when an express provision of law exists. Hence, a charge cannot be enforced against a transferee if they have no notice of the same, unless the requirement of such notice has been dispensed with by law. Dattatreya Shanker Mote v. Anand Chintaman Datar, (1974) 2 SCC 799; State of Karnataka v. Shreyas Papers Pvt. Ltd., 2006 (1) SCC 615 97. In AI Champdany Industries Ltd. v. Official Liquidator, (2009) 4 SCC 486 this Court held that such a provision of law should not merely create a charge, but it must expressly provide for the enforcement of a charge against the property in the hands of a transferee for value without notice of the charge. 98. In Haji Abadulgafur Haji Husseinbhai (supra), this Court considered the doctrine of constructive notice as provided Under Section 100. In that case, the Municipal Corporation had a charge on the property of a person who was in arrears of property tax. An auction purchaser,....
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.... shall be enforceable against a transferee without notice. It is pertinent to note that this Court has reiterated that arrears of electricity cannot become a charge or encumbrance over the premises, in the absence of an express provision of law in the 1910 Act, 1948 Act or 2003 Act. 1995 SCC (2) 648; AIR 2007 SC 2; (2010) 9 SCC 145 101. In Isha Marbles (supra), this Court observed that under the provisions of 1910 Act read with 1948 Act, electricity arrears do not create a charge over the property. It observed: 56. From the above it is clear that the High Court has chosen to construe Section 24 of the Electricity Act correctly. There is no charge over the property. Where that premises comes to be owned or occupied by the auction-purchaser, when such purchaser seeks supply of electric energy he cannot be called upon to clear the past arrears as a condition precedent to supply. What matters is the contract entered into by the erstwhile consumer with the Board. The Board cannot seek the enforcement of contractual liability against the third party. Of course, the bona fides of the sale may not be relevant. 102. Similarly, in Paschimanchal Vidyut Vitran Nigam (supra), thi....
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.... the state legislation and relevant subordinate legislation. For example, the Kerala Electricity Duty Act 1963 and Kerala Electricity Duty Rules 1963 provide that the dues from a consumer towards electricity duty create a first charge on the amounts recoverable for the energy consumed. 107. However, Entry 53 of List II of the Seventh Schedule does not have any bearing on the issues involved in this batch of cases. This is because neither is any tax levied Under Article 265 of the Constitution nor is any levy imposed. It is not the case of the distribution licensees that the State Commission Under Section 50 of the 2003 Act has the power to provide for fiscal exactions. 108. A subordinate Rule or Regulation, as in the case of the Electricity Supply Code framed by a regulatory commission, can provide for a statutory charge to be fastened on the premises within which consumption of electricity was effected. In terms of Section 50 of the 2003 Act, a State Commission is empowered to provide for recovery of electricity charges, intervals for billing of electricity charges, disconnection of supply of electricity for non-payment thereof, restoration of supply of electricity and other....
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.... State Government Under Section 19 of the Madras General Sales Tax Act, 1939 was ultra vires. In terms of Rule 21-A, a purchaser of a business carried on by a 'dealer' could be made liable for arrears of sales tax due from the dealer in respect of transactions of sale which took place before the transfer. This Court held that the Rule making power Under Section 19 could not be used to enlarge the scope of recovery and payment of tax from some person other than a 'dealer' under the Act. Section 10, inserted by the Amendment Act of 1956, provided that the outstanding amount on the date of default was made a charge on the property of the person liable to pay tax. This Court did not consider the import of Section 10 of the Act since the business was transferred before the amending Act came into force. The ratio of the case is neither helpful nor applicable in the instant case, since this Court was dealing with the specific provisions of the Madras General Sales Tax Act 1939. 112. The provisions of the statute and statutory conditions of supply need to be examined to determine whether the conditions of supply provide for the creation of a charge in terms of Section 10....
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.... disconnection can be maintained i.e., so long as the outstanding dues remain; and (c) when it is to be restored i.e., immediately when the outstanding dues are paid. Reliance has been placed on Ajmer Vidyut Vitran Nigam Limited v. Rahamatullah Khan (2020) 4 SCC 650, and M/s. Prem Cortex v. Uttar Haryana Bijli Vitran Nigam Limited Judgment dt. 5.10.2021 in CA 7235 of 2009 to contend that the use of the expression "under this section" in Section 56(2) means that the avenue of effecting disconnection to recover money cannot be resorted to after the limitation period. It is further contended that Section 56 does not bar the recovery of pending charges through other avenues of recovery in accordance with law. The licensees urge that civil remedies and statutory power to recover electricity can be utilised simultaneously. It was urged that Section 56 does not restrict the right of the licensee to insist on payment of the arrears of charges incurred on the premises, from a subsequent applicant for a fresh connection to the same premises. 115. On the implication of the two-year limitation period Under Section 56(2), it is submitted that (i) the limitation is with reference to the bar o....
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....judice to his rights to recover such charge or other sum by suit, cut off the supply of electricity and for that purpose cut or disconnect any electric supply line or other works being the property of such licensee or the generating company through which electricity may have been supplied, transmitted, distributed or wheeled and may discontinue the supply until such charge or other sum, together with any expenses incurred by him in cutting off and reconnecting the supply, are paid, but no longer: Provided that the supply of electricity shall not be cut off if such person deposits, under protest, - (a) an amount equal to the sum claimed from him, or (b) the electricity charges due from him for each month calculated on the basis of average charge for electricity paid by him during the preceding six months, whichever is less, pending disposal of any dispute between him and the licensee. (2) Notwithstanding anything contained in any other law for the time being in force, no sum due from any consumer, under this Section shall be recoverable after the period of two years from the date when such sum became first due unless such sum has been sho....
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....ity arrears. The liability to pay electricity charges is a statutory liability and Section 56 provides the consequences when a consumer neglects to pay any charge for electricity or any sum other than a charge for electricity due from him. Section 56(1) provides that the power of the licensee to disconnect electrical supply when a consumer is in default of payment is "without prejudice to his rights to recover such charge or other sum by suit". This means that the licensee can exercise both its statutory remedy to disconnect as well as a civil remedy to institute a suit for recovery against the consumer since the licensee will not necessarily obtain the amount due from the consumer by disconnecting the supply. In its decision in Bihar SEB v. Iceberg Industries Ltd. (2020) 20 SCC 745, this Court has held that the power to disconnect supply Under Section 56 is a special power given to the supplier in addition to the normal mode of recovery by instituting a suit. The power to disconnect the supply of electricity as a consequence of the non-payment of dues and as a method to recover dues is supplemental to the right of the licensee to institute a suit or other proceedings for the recov....
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.... the licensee to recover any sum due from a consumer Under Section 56 after a period of two years from the date when such sum became first due. If this provision is invoked against a consumer after two years, the action will be permissible when the sum, which was first due, has been shown continuously as recoverable as arrears of charges for electricity supplied. Under Section 56, the liability to pay arises on the consumption of electricity and the obligation to pay arises when a bill is issued by the licensee for the first time. Accordingly, the period of limitation of two years starts only after issuance of the bill. 125. Before we deal with the implication of Section 56(2) on the civil remedies available to a licensee, it is important to clarify that when the liability incurred by a consumer is prior to the period when the 2003 Act came into force, then the bar of limitation Under Section 56(2) is not applicable. In Kusumam Hotels Pvt. Ltd. v. Kerala State Electricity Board (2008) 12 SCC 213, this Court has held that Section 56(2) applies after the 2003 Act came into force and the bar of limitation Under Section 56(2) would not apply to a liability incurred by the consumer p....
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....2) of Section 56 of the Act 7.5 The period of limitation of two years would commence from the date on which the electricity charges became "first due" Under Sub-section (2) of Section 56. This provision restricts the right of the licensee company to disconnect electricity supply due to non-payment of dues by the consumer, unless such sum has been shown continuously to be recoverable as arrears of electricity supplied, in the bills raised for the past period. If the licensee company were to be allowed to disconnect electricity supply after the expiry of the limitation period of two years after the sum became "first due", it would defeat the object of Section 56(2). 8. Section 56(2) however, does not preclude the licensee company from raising a supplementary demand after the expiry of the limitation period of two years. It only restricts the right of the licensee to disconnect electricity supply due to non-payment of dues after the period of limitation of two years has expired, nor does it restrict other modes of recovery which may be initiated by the licensee company for recovery of a supplementary demand. 9. Applying the aforesaid ratio to the facts of th....
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....that the bottom line of Sub-section (1) is the negligence of any person to pay any charge for electricity. Sub-section (1) starts with the words "where any person neglects to pay any charge for electricity or any sum other than a charge for electricity due from him". 24. Sub-section (2) uses the words "no sum due from any consumer under this Section". Therefore, the bar Under Sub-section (2) is relatable to the sum due Under Section 56. This naturally takes us to Sub-section (1) which deals specifically with the negligence on the part of a person to pay any charge for electricity or any sum other than a charge for electricity. What is covered by Section 56, Under Sub-section (1), is the negligence on the part of a person to pay for electricity and not anything else nor any negligence on the part of the licensee. (emphasis supplied) 129. The period of limitation Under Section 56(2) is relatable to the sum due Under Section 56. The sum due Under Section 56 relates to the sum due on account of the negligence of a person to pay for electricity. Section 56(2) provides that such sum due would not be recoverable after the period of two years from when such sum became first ....
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....uired to undertake due diligence of outstanding dues which are premises specific. On the other hand, the auction purchasers submitted that (i) a condition such as "as is where is" is a feature of physical property and does not extend to claims which are not charges or other encumbrances running with land; (ii) the argument finds support in the decisions in Punjab Urban Planning and Development Authority v. Raghu Nath Gupta (2012) 8 SCC 197 and Delhi Development Authority v. Kenneth Builders and Developers Pvt. Limited (2016) 13 SCC 561; (iii) electricity dues cannot be ascertained merely by looking at a property; and (iv) there was no obligation on the applicants to ascertain the electricity dues payable, more so in view of the judgment in the Isha Marbles (supra). 133. In the present batch of cases, the premises were sold in auction sales generally held on an "as is where is" basis. A sale on "as is where is basis" postulates that the purchaser would be acquiring the asset with all its existing rights, obligations and liabilities. When a property is sold on an "as is where is" basis, encumbrances on the property stand transferred to the purchaser upon the sale. 134. In U.T. ....
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..../premium or the stipulated interest on the delayed payment, or the ground rent, on the ground that the site suffers from certain disadvantages or on the ground that amenities are not provided.... (emphasis supplied) 135. In Raghu Nath Gupta (supra) (2012) 8 SCC 197, this Court held that a successful auction purchaser of commercial plots sold with a superimposed condition of "as is where is" basis is estopped from later contending that he is not bound by the terms and conditions of the auction notice or that the seller had not provided basic amenities. The Court relied on the terms and conditions, specifically Clause 25, stipulated in the auction notice published by Punjab Urban Planning and Development Authority in reaching its conclusion and held that the auction notice would have considerable bearing in resolving the dispute. Clause 25 of the auction notice provided that the site was offered on "as is where is" basis and the Authority would not be responsible for levelling the site or removing structures, if any, thereon. The phrase "as is where is" was explained by this Court in the following terms: 14. We notice that the Respondents had accepted the commercial pl....
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....ysical issues pertaining to the project land and ancillary or peripheral legal issues pertaining to the actual construction activity". It was observed: 34. When the DDA informed Kenneth Builders that the project land was available on an "as is where is basis" and that it was the responsibility of the developer to obtain all clearances, the conditions related only to physical issues pertaining to the project land and ancillary or peripheral legal issues pertaining to the actual construction activity, such as compliance with the building bye-laws, environmental clearances etc. The terms and conditions of "as is where is" or environmental clearances emphasized by learned Counsel for the DDA certainly did not extend to commencement of construction activity prohibited by law except after obtaining permission of the Ridge Management Board and this Court. On the contrary, it was the obligation of the DDA to ensure that the initial path for commencement of construction was clear, the rest being the responsibility of the developer. The failure of the DDA to provide a clear passage due to an intervening circumstance beyond its contemplation went to the foundation of implementation o....
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....ile owner were sold under the State Financial Corporations Act 1951 on an "as is where is" basis. This Court held that an auction purchaser cannot be considered an ignorant party and a reasonable enquiry would have put it on notice of the subsistence of such a liability. It was observed: 9. .... Before submitting its bid to the Financial Corporation the first Respondent would certainly have inspected the premises and could have come to know that power connection to the premises had been snapped and this information should have put it on reasonable enquiry about the reasons for the power disconnection leading to the information that the previous owner of the undertaking or consumer was in default. Moreover, the Appellant had clearly written to the Financial Corporation even before the sale was advertised by it, informing it that a sum of Rs. 64,23,695/- was due towards electricity charges to the Appellant and when selling the undertaking, that amount had to be provided for or kept in mind. Therefore, any reasonable enquiry by the first Respondent as a prudent buyer would have put it on notice of the subsistence of such a liability. The sale was also on 'as is where is&#....
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.... it becomes the duty of the buyer to exercise due diligence. A seller is not under an obligation to disclose patent defects of which a buyer has actual or constructive notice in terms of Section 3 of the Transfer of Property act, 1882. However, in terms of Section 55(1)(a), in the absence of a contract to the contrary, the seller is under an obligation to disclose material defects in the property or in the seller's title thereto of which he is aware and which a buyer could not with ordinary care discover for himself. 143. While examining the effect of an "as is where is" clause, the facts and circumstances of each case individually, along with the terminology of the clauses governing the auction sales must be taken into consideration, to arrive at an equitable decision. G. Application: Facts of Individual Cases 144. Before we apply the above analysis to the facts of the individual cases, it needs to be clarified that each case involves, in one way or another, application of the conditions of supply or Electricity Supply Code. At the outset, we note that the relevant date to determine the applicability of the conditions of supply or Electricity Supply Code is the date o....
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....such intimation having been received the service shall be disconnected. If the transferee desires to enjoy service connection, he shall pay off the dues to the Board and apply for transfer of ownership of service connection within 15 days and execute fresh agreement and furnish additional security. New consumer number shall be allotted in such cases cancelling the previous number. 15(d): All dues to the Board from a consumer shall be the first charge on the assets of the consumer. All dues including penalty shall be realized as public revenue due on land. 15(e): Reconnection or new connection shall not be given into any premises where there are arrears on any account due to the Board pending payment, unless the arrears including penalty, if, any, are cleared in advance (if the new owner/occupier/ allottee remits the amount due from the previous consumer, the Board shall provide re-connection or new connection depending on whether the service remains disconnected/dismantled, as the case may be. The amount so remitted will be adjusted against the dues from the previous consumer if the Board gets the full dues from the previous consumer through R.R. action or other l....
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....SEB CA 2109-2110/2004 and KJ Dennis v. KSEB, CA 2108/2004 arise from the state of Kerala. In both these cases, the Kerala High Court upheld the validity of Clause 15(e) and directed that to avail a fresh electricity connection for premises where arrears are due, the auction purchasers would have to pay outstanding dues of the previous consumer in compliance with the said condition. Item 101.9: KJ Dennis v. Kerala State Electricity Board; Civil Appeal 2108 of 2004 149. The KSEB disconnected the electricity connection of Pearlite Wire Products Ltd. in 1992 on account of unpaid electricity charges. Meanwhile, the Kerala High Court ordered the winding up of the company under the Sick Industrial Companies (Special Provision) Act 1985, "SICA" as the original owner failed to pay its dues to Syndicate Bank and Kerala Financial Corporation. On 20 April 1997, KSEB addressed a letter to the Official Liquidator, demanding payment of Rs. 66 lakhs, being arrears of electricity charges and penal interest. On 27 January 1999, the offer of the Appellant to purchase the properties of Pearlite Wire Products Ltd. was accepted and was confirmed by the Kerala High Court on 4 March 1999. The terms ....
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....tricity upon such terms and conditions as it thinks fit, that is, in accordance with Clause 15(e). The Court further noted that even when all formalities have been satisfied by a prospective consumer in accordance with Clause VI of the Schedule to the 1910 Act, the Board retains the power to lay down appropriate Regulations to safeguard electricity, which is public property and take actions in the best interest of the Board. The Court placed reliance on the judgment of the Kerala High Court in A. Ramachandran v. KSEB 2000 SCC OnLine Ker 75 in reaching its decision. 153. In the impugned judgment dated 14 September 2001 in the Review Petition, the Court further clarified that Clause 15(e) can also be invoked in winding up proceedings as the manner in which the new person became owner, allottee or occupier of the property is immaterial. Finally, the High Court clarified that the mere fact that the Electricity Board was trying to recover the due amount as a secured creditor before the winding up proceedings as against the previous owner, would be of no consequence on the applicability of Clause 15(e). 154. Notice was issued by this Court on 25 January 2002. By an order dated 28 F....
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....ly applied to KSEB for an electric connection to the purchased premises. Subsequently, on 1 January 1990, Clause 15 of the Conditions of Supply of electrical energy was effectuated. On 12 June 1990, the KSEB sent a communication to the Appellant, refusing to grant an electric connection unless the Appellant paid the arrears of electricity of the premises. As a consequence, the Appellant filed a writ petition seeking a permanent electrical connection and challenging Clause 15(e) of the Conditions of Supply. 158. The High Court in the judgment dated 13 February 2003 relied on KJ Dennis (supra) and A Ramachandran (supra), and rejected the prayer of the auction purchaser to get an electricity connection without paying the dues of the previous owner to the KSEB. The Appellant filed a review petition against the judgment dated 13 February 2003. It was the Appellant's contention that the decisions in Ramachandran (supra) and KJ Dennis (supra) are inapplicable to the facts of the case. The Appellant submitted that the "judgment under review was delivered without taking note of the fact that condition 15(e) was incorporated in the Conditions of Supply of Electrical Energy only with e....
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....te of the application for the grant of a power connection. In view of the material factual dispute and insufficient evidence on record, we remand the matter to the High Court to determine whether Condition 15 of Conditions of Supply of Electrical Energy would apply to the Appellant's case, bearing in mind the principles which have been laid down in this judgment. II. Maharashtra 164. In the state of Maharashtra, the terms and conditions under which the MSEB supplied electrical energy were provided in the MSEB Conditions of Supply. The MSEB Conditions of Supply were made effective from 1 January 1976. The MSEB Conditions of Supply laid down a detailed procedure in respect of the application for supply of electrical energy, payment of bills, procedure to be adopted in case of prejudicial use of electrical energy and the terms on which the supply of electrical energy is released to a consumer. Condition 23 of MSEB Conditions of Supply provides for assignment and transfer of agreement. 165. In light of the New Industrial Development Policy 1993, aimed at reviving sick industries, the MSEB issued Circular 518 dated 18 June 1993, titled "Power Supply to closed and Sick Indus....
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....the legal representatives/successors-in-law or transferred to the new owner/occupier of the premises, as the case may be, and the same shall be recoverable by the Distribution Licensee as due from such legal representatives or successors-in-law or new owner/occupier of the premises, as the case may be. Provided that, except in the case of transfer of connection to a legal heir, the liabilities transferred under this Regulation 10.5 shall be restricted to a maximum period of six months of the unpaid charges for electricity supplied to such premises 169. Presently, the Maharashtra Electricity Regulatory Commission (Electricity Supply Code and other Standards of Performance of Distribution Licensees including Power Quality) Regulations 2021 "2021 Regulations" have been enacted repealing the Maharashtra Electricity Supply Code 2005. Clause 12.5 of the 2021 Regulations reiterates that any unpaid charges for electricity shall be a charge on the premises. 170. From the state of Maharashtra, there are six judgments of the Bombay High Court which are in appeal before us. 171. Mr. Ajit Bhasme, learned Senior Counsel appearing on behalf of the Appellant-Board urged the follo....
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....is due to the following reasons: i. By virtue of Section 185(2)(a) of the 2003 Act, notwithstanding such repeal anything done or any action taken or purported to have been done or taken including any rule, notification, inspection, order or notice made etc. under the repealed law shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act. Section 185(2)(5) further provides that Section 6 of the General Clauses Act 1897 would be applicable in relation to matters prescribed in Section 185(2) with regard to the effect of repeals; ii. Regulation 19(1) of the Electricity Supply Code 2005, provides that any terms and conditions of supply which are inconsistent with the provisions of the Maharashtra Electricity Supply Code 2005 shall be deemed to be invalid from the date on which these Regulations come into force; and c. From 20 January 2005 till the enactment of the 2021 Regulations: The Maharashtra Electricity Supply Code 2005, which came into force from 20 January 2005, would apply. To determine whether the Maharashtra Electricity Supply Code 2005 would govern....
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....shtra State Electricity Distribution Co. Ltd. v. M/s. Zia Iron Store, SLP(Civil) No. 6068 of 2006 the High Court considered the purport of Condition 23 of the MSEB Conditions of Supply. It concluded that Condition 23 was not applicable to involuntary transfers, such as by operation of law or in pursuance of the decree of a competent court. Accordingly, it held that the Respondent-purchasers could not be made liable for the dues of the erstwhile owners as a prerequisite to obtain a new electricity connection. 178. The Bombay High Court in the impugned judgment dated 20 July 2005 in Ecto Spinners was aided by the following reasons to arrive at this conclusion: a. Condition 23(b) does not refer to an involuntary transfer though it does refer to a voluntary transfer or a transfer on account of the death of the owner. The word "successor" in the expression "any person claiming to be heir, legal representative, transferee, assignee or successor of the defaulting consumer" would have to be understood by applying the principle of ejusdem generis. Accordingly, the words preceding the word "successor" clearly disclose a reference to a person who acquires the right to the property....
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....which pertains to the liability of a person who acquires the property of the erstwhile consumer in circumstances specified thereunder. Circular 607 dated 19 December 1998 is stated to emanate from Condition 23(b) of the Conditions of Supply. The Bihar State Electricity Board in Isha Marbles (supra) did not have a specific condition having a similar effect as Condition 23. 183. In Hyderabad Vanaspathi (supra) this Court held that the Conditions of Supply in the State of Andhra Pradesh, notified in exercise of the powers conferred by Section 49 of the 1948 Act, are statutory in character. The Court noted that no Regulation has been made Under Section 79(j) of the 1948 Act. 184. In the present case, the Appellant-Board in exercise of its powers Under Section 49 of the Electricity Supply Act formulated the MSEB Conditions of Supply. Accordingly, the MSEB Conditions of Supply are statutory in nature. 185. When a provision having a statutory force and effect is relied upon by the Electric Utilities to impose the liability of clearing the outstanding dues of the erstwhile consumer on a third party, it is for the courts to determine whether the said statutory provision is applicab....
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....be duly paid to or deposited with the Board. (emphasis supplied) 187. In terms of Condition 23(a), a consumer is not entitled to transfer the benefit under their agreement with the Electricity Board without the previous consent of the Board. In terms of Condition 23(b), if the consumer commits breach of Condition 23(a) and neglects to pay the Board any charges for energy and consequently, the electricity supply of such consumer is disconnected, then the third party upon whom such a transfer was effected is liable to pay arrears of electricity which the defaulting consumer has not paid. Liability of a third party to pay dues of the erstwhile consumer is attached when the conditions specified in Condition 23(a) and Condition 23(b) are satisfied. 188. The Rule of "ejusdem generis" is a principle of construction. The Rule is that when general words follow particular and specific words of the same nature, the general words must be confined to the things of the same kind as those specified. It applies when the following ingredients are present: (i) the statute contains an enumeration of specific words; (ii) the subjects of enumeration constitute a class or category; (iii) that c....
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....a property interest is conveyed Black's Law Dictionary (WEST: Thomson Reuters 9th edition), Pg 136 Assignee: One to whom property rights are transferred by another Black's Law Dictionary (WEST: Thomson Reuters 9th edition), Pg 1636 192. It is clear from the plain meaning of the words that the expressions "heir", "legal representative", "transferee" and "assignee" do not fall into one single distinct category. According to the reasoning in the impugned judgment, Condition 23 itself consists of more than one genus or category of transfer - acquiring the right to a property on account of voluntary transfer, or on account of death of the owner. The word "successor", which was interpreted by the High Court in a restricted manner, is itself of wide amplitude and will have to be given a plain meaning. The expression "successor" has been defined in Black's Law Dictionary as "a person who succeeds to the office, rights, responsibilities, or place of another; one who replaces or follows a predecessor." Black's Law Dictionary (WEST: Thomson Reuters 9th edition), Pg 1569 The category of a "universal successor" is further understood to mean "someone who succeeds to a....
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.... question whether a compulsory acquisition of property is a "sale" within the meaning of Section 12-B(1) and indeed, it is needless for the present purpose to go that far. We are concerned with the narrower question whether a compulsory acquisition of property can amount to a "transfer" within the meaning of Section 12-B(1) and upon that question it is important to bear in mind that the word "transfer" is comprehensive and is regarded generally as comprehending within its scope transfers both of the voluntary and involuntary kinds. Without more, therefore, there is no reason for limiting the operation of the word "transfer" to voluntary acts of transfer so as to exclude compulsory acquisitions of property. (emphasis supplied) 196. The Rule of ejusdem generis cannot be applied when there is no distinct category or a genus. In the absence of a genus, the words 'transfer' or 'otherwise dispenses of', which are wide in their meaning, cannot be restricted to only mean voluntary transfers by the application of the ejusdem generis principle. 197. The Rule of ejusdem generis is not an inviolable Rule of law. Valparaiso Kottarathil Kochuni v. States of Madras & Kera....
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....y refers to the consumer who failed to pay the dues and does not concern itself with a new owner or occupier of the premises. 201. The Appellant preferred the present Special Leave Petition. This Court issued notice on 6 May 2003 and leave was granted on 25 August 2005. By an order dated 24 August 2006, the question whether electricity dues constitute a charge on the property so far as the transferor and the transferee of the unit are concerned was referred to a larger bench. 202. In our considered view, the decision in Isha Marbles (supra) and Section 24 of the Electricity Act 1910 are by themselves not an answer on whether the Appellant-Board had a power to issue Circular 607. In Srigdhaa Beverages (supra), this Court held that the electricity dues, where they are statutory in character under the Electricity Act and as per the terms and conditions of supply, cannot be waived in view of the provisions of the Act itself, more specifically Section 56 of the 2003 Act (pari materia with Section 24 of the 1910 Act), and cannot partake the character of purely contractual dues. The power of the Appellant-Board to impose a condition that the purchaser of an undertaking will have the....
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.... own inquiries about arrears of dues for supply of power, water and other facilities, if any, and the same shall be borne and paid by the purchaser alone. (emphasis supplied) 205. The aforesaid terms and conditions of the auction as set out by SICOM indicate that the property was being sold on "as is where is and what is basis". The auction purchaser was at all times on clear notice of the fact that the property was being sold on an "as is where is" basis and that SICOM did not undertake any liability for the payment of dues. This Clause was further subject to another provision in Clause 6, where the purchaser was liable to make their own inquiries about arrears of dues for supply of power, water and other facilities and the auction purchaser was made liable to pay such arrears. This makes it clear that apart from the MSEB Conditions of Supply, which have statutory effect, the purchaser who purchased property in auctions conducted Under Section 29 of the State Financial Corporations Act also had knowledge of his liability for the past arrears of electricity of the premises when he bid in the auction. By virtue of the stipulations in the sale deed, as far as the first Responde....
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....o clear the electricity arrears incurred by the previous owners because there was no specific statutory provision in that regard, or any Clause dealing with the issue of electricity dues. In the present case, the MSEB placed specific reliance on Condition 23 of MSEB Conditions of Supply to hold the auction purchasers liable. The MSEB Conditions of Supply were incorporated in the individual contracts entered between the Electricity Board and the consumers. Clause 14 in the standard agreements entered between the MSEB and consumers provides that the Conditions of Supply, as amended from time to time, shall be deemed to be part of the agreement. The erstwhile consumers were aware of the statutory MSEB Conditions of Supply. The relevant Clause is extracted below: Clause 14(a): Condition and Miscellaneous Charges for supply of electrical energy of the Maharashtra State Electricity Board for the time being in force and as amended by supplier from time to time shall be deemed to be part of the Agreement and shall govern the parties hereto in so far as applicable. A copy of the current Conditions and Miscellaneous Charges for supply is set out in the second Schedule hereto. 211....
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.... of 2006 215. The original consumer, M/s. Sumit Re-Rolling Mills Pvt. Ltd., Nagpur, defaulted in the payment of a loan taken from the Nagpur Nagrik Sahakari Bank. The bank filed a dispute before the Co-operative court at Nagpur. The Judge, Cooperative court at Nagpur by an order dated 23 February 2005 granted permission to sell the hypothecated plant and machinery and mortgaged land and building of M/s. Sumit Re-Rolling Mills Pvt. Ltd. In the execution of the award, the property belonging to M/s. Sumit Re-Rolling Mills Pvt. Ltd. was purchased by the first Respondent. 216. The authorised officer of the bank handed over the physical possession of the entire moveable plant and machinery and immovable land and building, mortgaged with the bank, to the Respondent on 21 March 2005 on "as is where is" and "as is what is" basis. 217. A deed of assignment and sale dated 17 February 2006 was entered between the Nagpur Nagarik Sahakair Bank Ltd. and the Respondent. Clause 2 of the indenture notes that the bank would not take any liability for any dues like electricity dues and charges for fresh power connection. The relevant Clause is extracted below: The liabilities, if any....
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....supply of electricity is the date on which the auction purchaser applies for an electricity connection. 221. The application by the Respondent in which it sought a fresh electricity connection has not been placed on record. At the same time, from the deed of assignment and sale placed on record, it emerges that the sale of the premises and possession was given after 20 January 2005. The permission to sell was granted to the bank only on 23 February 2005. The physical possession of the premises was given to the Respondent only on 21 March 2005. A fresh connection of electricity supply could not have been requested even before the sale was confirmed in favour of the Respondent. Accordingly, the relevant statutory provision governing this case is the Maharashtra Electricity Supply Code 2005. 222. In terms of Regulation 10.5, any charge for electricity or any sum other than a charge for electricity due to the distribution licensee which remains unpaid by a deceased consumer or the erstwhile occupier/owner of any premises shall be a charge on the premises transmitted to the legal representatives/successors-in-law or transferred to the new owner/occupier of the premises, as the cas....
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.... 10 February 2006, passed by a Single Judge at the Nagpur Bench of the Bombay High Court. The High Court held that the Appellant could not deny electricity connection to the Respondent on the ground of recovery of arrears of the erstwhile owner of the plot. The High Court noted that the Appellant was one of the secured creditors and directed it to make its claim before the Official Liquidator in accordance with law. 228. The Appellant preferred the present Special Leave petition. On 17 July 2006, this Court issued notice and stayed the operation of the impugned order. 229. During the pendency of the appeal, the Respondent had sold the property to M/s. Ankush Shikshan Santha and the new owner had submitted a proposal dated 9 August 2007 to the Appellant that it was prepared to settle the dues of M/s. Hariganga Alloys & Steel Ltd. in twelve instalments. By an order dated 22 October 2007, this Court directed the Appellant to restore the electricity connection after receipt of the first two instalments by the Respondent in view of the undertaking given by the Respondent that it shall deposit the entire arrears of Rs. 83 lakhs in terms of the proposal dated 9 August 2007. The Cour....
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....y connection. This was followed by a subsequent letter dated 2 January 2006. By letter dated 12 January 2006, the Appellant refused to give a new electric connection unless the arrears of Rs. 11 crores of the erstwhile owner of the property were paid. The Respondent filed a writ petition before the Bombay High Court, seeking an electricity connection. On 13 October 2006, the High Court passed the impugned order granting interim relief to the first Respondent. The High Court took note of the pending referral of the legal issue to a larger bench of this Court. It observed that the right of the Electricity Board to claim arrears from auction purchasers hinged upon the adjudication of the said issued. The High Court directed the Electricity Board to grant interim electricity connection subject to final adjudication of the rights of the parties. 235. The Appellant herein preferred the present Special Leave Petition against the interim order of the High Court. On 9 July 2007, leave was granted by this Court and the case was tagged with Civil Appeal No. 5312-5313 of 2005. The impugned order of the High Court granting interim electricity connection was stayed by this Court. 236. The ....
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.... 3. So far known to this office there are (no) arrears of Municipal tax, MSEB or Corporation tax or both taxes. However, any legitimate claim made in that behalf shall be paid from out of the sale proceeds if the same is in excess of the amount mentioned in the Recovery Certificate. In case such excess amount is not available the liability shall be borne by the purchaser. However, prospective purchaser is expected to check up from MIDC, CIDCO, MSEB, Municipal corporation etc. for the dues if any on the property. 4. The properties shall be sold on "AS IS WHERE IS BASIS". (emphasis supplied) 240. Accordingly, the dues owed by M/s. R & J Alloys Pvt. Ltd. to the MSEB are a charge on the property purchased by the first Respondent in a public auction. The charge attaches to the property and a distribution licensee is entitled to recover the unpaid dues from the first Respondent subject to the permitted period specified in the proviso to Regulation 10.5. 241. So far as the filing of civil suit by the Appellant in 2003 against the erstwhile owner is concerned, that is an alternative remedy provided by law which the Appellant can undertake in order to recover electrici....
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....2)(a) of the 2003 Act, the extant Conditions of Supply continued to apply. c. From 31 March 2005 when the Supply Code came into force: Clause 4.1.11 was notified under the Supply Code. The relevant Regulation is as follows: Regulation 4.1.11 An Application for new connection, reconnection, addition or reduction of load, change of name or shifting of Service Line need not be entertained unless any dues of the Applicant to the Distribution Licensee in respect of any other service connection held in his name anywhere in the jurisdiction of the Distribution Licensee have been cleared. d. From 20 August 2010 when the Supply Code was amended: Clauses 4.1.11, 4.1.16, and 4.8 of the Supply Code were notified Under Section 43 read with Section 50. Clause 4.1.11 post the amendment in 2010 reads thus: Clause 4.1.11 An application for new connection, reconnection, addition or reduction of load, change of name or shifting of service line for any premises need not be entertained unless any dues relating to that premises or any dues of the applicant to the Distribution Licensee in respect of any other service connection held in his name anywhe....
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....h Court, the consideration was paid and possession of the assets was handed over to the Appellant. When the Appellant applied for a fresh connection, the Respondent insisted on payment of outstanding dues of the previous owner before granting a fresh connection. The Appellant filed a writ petition challenging Clause 2(j) of the Conditions of Supply. The Single Judge allowed the writ petition and struck down Clause 2(j) of the Conditions of Supply for being arbitrary and inconsistent with statutory provisions of the law. The Respondent preferred special appeals against the judgment of the Single Judge before the Division Bench. The Division Bench by judgment dated 18 July 2005 upheld the validity of Clause 2(j) on the ground that it fell within the ambit and scope of Section 49(1) of the 1948 Act. 247. On 10 August 2001, Gujarat Electricity Board issued a notification Under Section 49 of the 1948 Act incorporating Condition 2(j) in the 'Condition and Miscellaneous Charges for Supply of Electrical Energy'. Condition 2(j) empowered the Board to insist on payment of arrears of electricity dues of the former consumer as a condition precedent to the restoration of the earlier ....
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....y, without prejudice to their rights and contentions. Upon compliance of above conditions, electricity connection shall be granted. 250. This Court has been informed that the Appellant chose not to get the fresh connection in terms as set out by this Court. Through an Interlocutory Application, the Appellant has indicated that it is impossible for them to pay the total accumulated dues amounting to Rs. 578 lakhs with interest and other charges. Therefore, the Appellant seeks the benefit of the amnesty scheme dated 29 March 2012 issued by the Gujarat government. Further, the Appellant submits that it can only clear its original liability upto Rs. 126 lakhs. The relevant part of the said application is extracted hereunder: 10. The applicants submit that the applicant is approaching this Hon'ble Court with the intention to get the benefit of this amnesty scheme of Government of Gujarat for only reasons that if the applicant succeeds, the Applicant would be required to pay original dues if the applicant lose the matter in the Hon'ble Supreme Court the liability of the applicant will be only upto Rs. 126.00 Lakhs (original amount) and the Applicant will not be liable....
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.... 252. After taking possession of the property, the Respondent addressed a letter dated 7 January 2004 to the Appellant for grant of an electricity connection. However, the Appellant declined to grant supply of electricity unless the Respondent paid the pending dues of the erstwhile owner. The Respondent filed a writ petition before the High Court of Gujarat challenging the Appellant's refusal to grant an electricity connection. Through a common judgment, the Single Judge held that Respondent, being an auction purchaser, cannot be called upon to clear the past arrears of the previous owners in the absence of any statutory provision. Further, it was observed that there was no condition between the parties by which the Respondents were made liable to pay the arrears of electricity dues of the previous owners. It was also observed that the state government had not incorporated any condition similar to Condition 2(j) of the Conditions of Supply in respect of the Petitioners. The Division Bench in the impugned judgment dated 1 May 2006 upheld the decision of the Single Judge. 253. The Respondent has submitted that the Gujarat Electricity Supply Code relied upon by the distributi....
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....ion for supply of energy. The requisition form is not only limited to a new connection, but also extends to reconnection, extension of load, tapping connection, and name change. The form also requires the applicant to pay all the dues of energy bills and other charges up to the date of transfer. The relevant undertaking is extracted below: I/We hereby give consent to transfer above mentioned service in the name of the applicant and I/We abide to pay all the dues of energy bills & other charges upto the date of transfer. 258. A perusal of Annexure A makes it evident that the above extracted undertaking is actually the undertaking of a 'current consumer' giving consent to transfer the service connection and undertaking to pay all past dues. This is not an undertaking of an applicant, which has been separately provided for in the same form. Therefore, Annexure A makes a clear distinction between a 'current consumer' and an applicant for electricity connection. Since the Respondent purchased the said property through an auction-purchase, there was no 'current consumer' to give any consent. Therefore, the undertaking under Form A will not be applicabl....
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.... Clause 4.1.11 of the Conditions of Supply was ultra-vires the provisions of 2003 Act. 261. It is beyond the pale of doubt that the Respondent requested the Appellant to release power supply to their premises on 16 December 2010. At the relevant point of time, the amended Clause 4.1.11 was in force. In the impugned judgment dated 03 December 2012, the High Court held that the State Commission is not authorised to prescribe a condition Under Section 50 of the 2003 Act for payment of dues of a previous owner or occupier from the new owner as a precondition to supply electricity. It was further held that Section 43 of the 2003 Act does not impose any condition for payment of electricity dues attached to the premises before getting supply of electricity. The High Court observed that the phrase "any dues relating to that premises" conveyed that the premises were held to be a defaulter of electricity dues and charges, and was inconsistent with the provisions of the 2003 Act. On the basis of the above reasons, the High Court concluded that the first part of Clause 4.1.11 was ultra vires the provisions of Sections 43, 50, 56, and 181 of the 2003 Act. 262. The Appellant submitted that....
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....s consumer relating to that premises are sought to be recouped from the new owner or occupier of the premises. 265. In the impugned judgment, the High Court referred to the example of a multi-storied residential building to observe that "the licensee may successfully demand that a new purchaser of a different flat whose vendor was not a defaulter, would still be liable to pay the arrears of a defaulting consumer of another flat of the same on the ground that it is a part of the same premises." In this context, we have already held that there is a synergy between the consumer and premises. A new owner can only be obligated to pay the electricity arrears of the previous owner with respect to the premises to which electricity connection is being sought. Therefore, the phrase "any dues relating to that premises" has to be understood with regard to the supply of electricity made to the premises when it was in occupation of the previous owner. 266. We have already clarified that electricity arrears do not automatically become a charge over the premises. A Statutory charge is created only where there is an express provision of law providing for creation of a statutory charge upon th....
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....n of Rs. 97 lakhs. 271. On 10 April 2007, the Respondent addressed a letter to the Appellant for release of the electricity connection. On 13 April 2007, the Appellant declined to grant a new connection unless the electricity charges amounting to Rs. 78 lakhs outstanding against the premises were paid. The Respondent filed a writ petition for the grant of an electricity connection. The petition was dismissed by a Single Judge by an order dated 08 September 2009 on the ground that the person who purchased the premises had to pay the electricity dues of the previous occupant. The Division Bench in the impugned judgment dated 16 July 2013 held that the subsequent purchaser is not liable to pay the electricity dues of the previous owner. 272. The auction-purchaser submitted an application for a new electric connection on 10 April 2007. The Gujarat Electricity Supply Code was notified on 31 March 2005. At the relevant time, unamended Regulation 4.1.11 was applicable, according to which only the dues of the applicant to the distribution licensee had to be cleared for the grant of a new connection or for reconnection of electric supply. The said Regulation did not obligate the new o....
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....in Gujarat Vij Co. Ltd. v. Amardeep Association; SLP (C) No. 73 of 2015 276. In 1994, Navsari Cotton and Silk Mills Ltd "NCSML"was declared a sick industrial unit. As on the date of NCSML's closure, it owed outstanding electricity dues of Rs. 416.36 lakhs. On 17 October 1994, the electricity supply was permanently disconnected. On 15 December 1996, the Board for Industrial and Financial Reconstruction "BIFR" prepared a New Rehabilitation Scheme Under Section 18 of SICA. The said scheme provided for sale of surplus land of NCSML under paragraph 2(g): (g) The plant and machinery of the weaving Section and the process house along with its building and the surplus land with the company are proposed to be disposed of and the sale proceeds of about Rs. 500 lakhs would be utilised for the implementation of the scheme. 277. Pursuant to the Rehabilitation Scheme of 1996, the Government of Gujarat passed a resolution inter alia granting (i) permission for sale of surplus land of NCSML; and (ii) exemption from power cut for five years to NCSML with the condition that, any reconnection charges as in the case of arrears shall be given to the Gujarat Electricity Board in insta....
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....ivision Bench in the impugned judgment dated 21 November 2014 upheld the decision of the Single Judge. The Court held that the BIFR scheme would be binding on the Appellant even though they were not a party to the proceedings. It was further held that SICA is a special Act in comparison to the 2003 Act. Therefore, a scheme framed under SICA was held to have an overriding effect over Clause 2(j) of the Conditions of Supply. 281. The Respondent has contended that according to the BIFR Scheme, electricity connection was provided to MDTLCIL separately and not to the surplus land sold to the Respondent. Hence, no dues could have been recoverable from the Respondent. The Respondent further contended that the rehabilitation schemes framed by BIFR have an overriding effect on the terms and conditions stipulated under Clause 2(j) of the Conditions of Supply. The Respondents have also drawn attention to Clauses 3 and 9 of the sale deed which exempted the Respondent from the payment of the past dues of NCSML. The said clauses are extracted below: (3) [...] On the said property, there is no debt i.e. lien or charge of anybody and is not under seize, attachment, or injunction of any....
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.... under the provisions of the Act: 32. Effect of the Act on other laws.-(1) The provisions of this Act and of any Rules or schemes made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law except the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973), and the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976), for the time being in force or in the Memorandum or Articles of Association of an industrial company or in any other instrument having effect by virtue of any law other than this Act. *** (emphasis supplied) 283. In Tata Motors Ltd. v. Pharmaceutical Products of India Ltd. (2008) 7 SCC 619 this Court held that SICA is a special legislation in comparison to the Companies Act. The Court observed: 22. The provisions of a special Act will override the provisions of a general Act. The latter of it (sic Act) will override an earlier Act. The 1956 Act is a general Act. It consolidates and restates the law relating to companies and certain other associations. It is prior in point of time to SICA. 23. Wherever any inconstancy (sic inconsistency) is seen in the provisio....
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....s of services of the employees of the State Electricity Board. The Court held that the 1948 Act is a special legislation in regard to the subject of development of electricity. It was observed: 7. [...] The Electricity Supply Act does not presume to be an Act to regulate the conditions of service of the employees of State Electricity Boards. It is an Act to regulate the co-ordinated development of electricity. It is a special Act in regard to the subject of development of electricity, even as the Industrial Employment (Standing Orders) Act is a special act in regard to the subject of conditions of service of workmen in industrial establishments. If Section 79(c) of the Electricity Supply Act generally provides for the making of Regulations providing for the conditions of service of the employees of the Board, it can only be regarded as a general provision which must yield to the special provisions of the Industrial Employment (Standing Orders) Act in respect of matters covered by the latter Act. 287. Keeping the above principle in mind, it is necessary to examine the subject matter of SICA and the 2003 Act. Under SICA, the operating agency had to prepare a scheme with r....
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....me being in force. Therefore, by specifically providing that the 2003 Act shall be in addition to and not in derogation of any other laws for time being in force, the Parliament has preserved and give precedence to the proceedings under SICA. Section 32 of SICA provides an overriding effect to a scheme framed under it. Section 18 of the SICA mandates an operating agency such as BIFR to prepare a scheme providing for transfer of business, properties, assets, and liabilities of the sick industrial company on terms and conditions as may be specified in the scheme. 290. SICA is a special statute and Section 32 read with Section 18(8) of the SICA gives an overriding effect to the Scheme. The 1996 Rehabilitation Scheme and the 2006 Revised Rehabilitation Scheme bind the Appellant, but override Clause 2(j) of the terms and conditions of supply. 291. Applying the above position of law to the facts of the present case, it is apparent that the Respondent purchased 'surplus land' of NCSML in pursuance of the rehabilitation scheme framed by BIFR. When the Respondent was given possession of the land in 2003, NCSML was a going concern as it continued to be operated by MDTLCIL. The ....
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.... Gujarat is stayed subject to Respondent No. 1 furnishing a bank guarantee of 50% of the total dues. It is made clear that the electricity will be supplied only on furnishing the aforesaid bank guarantee. Such of those purchasers who wish to pay the amount due to the Petitioner are permitted to do so. The Petitioner will consider the case on merits and take a decision on providing the electricity connection. 294. We accordingly vacate the stay on the impugned judgment dated 21 November 2014. Any amount furnished by the Respondent shall be refunded back. The appeal shall stand dismissed. Item 101.8: Paschim Gujarat Vij Co. Limited v. Sarifaben Mehboobbhai Solanki, SLP (C) No. 13400/2018 295. The electricity supply of Kanti Cotton Mills Pvt. Ltd., the previous owner, was disconnected on 09 June 1981. The mill was deemed to be a 'relief undertaking' Under Section 3 of the Bombay Relief Undertakings (Special Provisions) Act, 1958. In 1982, Gujarat State Textile Corporation "GSTC" took over the management of the Mill under the Industries (Development and Regulation) Act, 1951. In 1996, the BIFR submitted its report stating that huge losses were being s....
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.... 2017 preferred before this Court against the order dated 4 April 2014 was dismissed. 298. It is important to reiterate that the Appellant had also denied an electricity connection to JMIPL, the predecessor-in-title of Respondent. However, JMIPL filed a petition Under Article 226, which was allowed by a Single Judge of the High Court. The Appellant filed a Letters Patent appeal, which was dismissed by the Division Bench of the High Court by a judgment dated 04 April 2014 on the ground of limitation. The Ombudsman, in its order dated 30 March 2015, based its decision on this judgment of the Division Bench. The judgment dated 04 April 2014 attained finality. The right of the Respondent to receive supply of electricity stood crystallised on the judgment attaining finality upon the dismissal of the Special Leave Petition filed by the Appellant. Therefore, the order passed by the Ombudsman, and the subsequent orders passed by the High Court affirming the decision of the Ombudsman, do not suffer from any infirmity. The impugned judgment of the High Court is upheld for that reason. The appeal shall stand dismissed. Item 101.16: Torrent Power Ltd. v. M/s. Abhisar Developers, SLP(C) 9....
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....erred. In all cases of such transfers, the arrears of every description shall be paid in full together with transfer fee as prescribed in relevant GERC Regulations. [...] 4.8.4 Where Premises to which electricity is supplied by Licensee is transferred to transferee and the transferee does not get service connection in the Premises transferred to his name, and continues to use the service connection in previous name, the transferee shall be responsible for payment of running energy bills as well as unpaid dues of energy bills and other amounts relating to the service connection. The dues to the Distribution Licensee shall be payable on demand, in default of which the supply to the Premises may be disconnected, subject to the provisions of the Acts, rules, and Regulations for the time being in force. 303. Clause 4.1.16 of the Gujarat Electricity Supply Code obligated the distribution licensee to provide no-dues certificate when requested by a consumer "to avoid any possibilities of pending dues of the previous owner while purchasing new house/premises." This is only a procedural provision and does not per se impose any obligation on the subsequent owner of the pr....
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.... the time when the Respondent applied for a fresh connection of electric supply, there was no existing provision requiring the applicant of a new connection to clear the dues of the previous owner linked to the premises. Therefore, the judgment dated 3 December 2012 of the High Court has to be upheld. The appeal shall stand dismissed. IV. Assam 308. The Assam Electricity Regulatory Commission framed the AERC Supply Code on 30 August 2004 in exercise of its power Under Section 50 of the 2003 Act to provide for recovery of electricity charges. Clause 3.6 deals with requisition of supply. Clause 3.6.4 is extracted below: 3.6.4 In case of a person occupying a new property, it will be the obligation of that person to check the bills for the previous months or, in case of disconnected supply, the amount due as per the licensee's records immediately before his occupation and ensure that all outstanding electricity dues as specified in the bills subject to limitation as per Sub-section (2) of Section 56 of the Act are duly paid up and discharged. The licensee shall be obliged to issue a certificate of the amount outstanding from the connection in such premises on request....
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....s owner could be effected in execution of the decree. From the perusal of the facts, it is true that the Respondent had already instituted a money suit against the previous consumer and obtained a decree. However, the Respondent has stated before the High Court that the execution could not be carried out successfully. In these proceedings, we are not concerned with the validity of the execution proceedings initiated by the Respondent against the previous owner. 313. The Respondent has submitted that before purchasing the premises, the Appellant was required to undergo due-diligence and verify that there were no electricity dues in relation to the premises. The Respondent has also questioned the validity of the sale in favor of the Appellant on the ground that there was a subsisting money decree in favour of the Respondent and the premises were under Court attachment. The Respondent also referred to a State Government order dated 29 November 2004 directing Deputy Commissioners and Sub-divisional Officers to not issue sale/ transfer permission of land without clearance of the electricity dues. On 26 June 2006, the electricity distribution companies also issued a public notice requ....
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....nt shall be adjusted with the power bills of the Appellant. V. West Bengal 316. In West Bengal, the WB Electricity Supply Code have been enacted in 2012 under the 2003 Act. The relevant Regulations - Clause 3.4.2, 4.6.1 and 4.6.4- are set out below: 3.4.2. The licensee shall be eligible to recover from a new and subsequent consumer(s) the dues of the previous and defaulting consumers in respect of the same premises only if a nexus between the previous and the defaulting consumer(s) and the new consumer(s) in respect of the same premises is proved. The onus of proving a nexus, if claimed by a licensee, shall lie on the licensee. 4.6.1. If the power supply to any consumer remains disconnected continuously for a period of one hundred and eighty days where the disconnection has been effected in compliance with any of the provisions of the Act or Regulations, the agreement of the licensee with the consumer for supply of electricity shall be deemed to have been terminated with consequential effect on expiry of the said period of one hundred and eighty days. This will be without prejudice to such other action or the claim that may arise from the disconnection of su....
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....ts dies affecting the properties [prior] to submitting their bid. The E-auction advertisement does not constitute and will not be deemed to constitute any commitment or any representation of the bank. The properties is being sold with all the existing and future encumbrance whether known or unknown to the bank and authorised officer secured creditor shall not be responsible in any way for the third party claims, rights, dues. *** 7. It shall be the responsibility of the interested bidders to inspect and satisfy themselves about the properties before submission of the bid. Clause 1 of the terms and conditions provided that the e-auction was being held on an "as is where is basis". Clause 2 provided that the property was being sold with all present and future encumbrances, whether known or unknown to the bank. Clause 7 provided that it was the responsibility of interested bidders to inspect and satisfy themselves about the properties before submission of the bid. 319. On 31 August 2018, the assets of the previous owner were taken over by Magnum Tradelink Private Limited through an e-auction. The registration of property was done in the name of Shree Ramdoot Ro....
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....4.6.4 has an overriding effect as it begins with a non-obstante clause. The Respondent, on the contrary, has argued that Regulation 3.4.2 would be applicable in the present case. It has been argued that Regulation 4.6.4, despite having a non-obstante clause, has no bearing on the operation of Regulation 3.4.2. 322. The supply of electricity was disconnected on 21 September 2016. The supply stood disconnected for more than 180 days on 14 August 2018 which was the date of auction notice and on 31 August 2018 which was the date on which the premises were sold to the Respondent. In terms of Regulation 4.6.1, there was deemed termination of the agreement since the supply was disconnected for more than 180 days. However, Regulation 4.6.4 requires "any consumer" to clear the outstanding dues of the premises to be eligible for grant of service connection. In the present case, the Respondent cannot be considered a "consumer" unless an agreement was entered into with the distribution licensee. This has also been reiterated in Isha Marbles (supra) in the following words: 62. No doubt, from the tabulated statement above set out, the auction-purchasers came to purchase the property ....
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....2003 Act was enacted to promote the development of the electricity industry, while protecting the interest of consumers. It must be kept in mind that many of the auction-purchasers are commercial entities who had purchased the premises for commercial ventures. Electricity being a necessity for operation of any commercial venture, denial of electricity connections to the auction-purchasers for an indefinite period of time resulted in loss of business. The delay in the court proceedings should not be to the further detriment of the litigants. 328. Taking all facts and circumstances into consideration, including the lapse of more than two decades since the appeals were filed before this Court and the equities arising in favour of one party or the other, we direct the Electric Utilities to waive the outstanding interest accrued on the principal dues from the date of application for supply of electricity by the auction purchasers. I. Conclusions 329. The conclusions are summarised below: a. The duty to supply electricity Under Section 43 of the 2003 Act is not absolute, and is subject to the such charges and compliances stipulated by the Electric Utilities as part of t....