Jharkhand High Court
Ms Sanjeev Trading Company Through Its ... vs Jharkhand State Urja Vikas Nigam ... on 4 December, 2014
Author: D. N. Patel
Bench: Virender Singh, D. N. Patel
1
IN THE H IGH COURT OF JHARHAND AT RANCHI
L. P. A. No. 245 of 2014
M/s Sanjeev Trading Company through its proprietor Sri
Sanjeev Arora son of Sri Binod Kumar Arora, Resident of
West Market Road, Upper Bazar, Ranchi, PO- G.P.O., PS-
Kotwali, District- Ranchi
...... Appellant
Versus
1. Jharkhand State Urja Vikas Nigam Limited through
its Secretary, PO- Dhurwa, PS- Jgarnathpur, District-
Ranchi
2. Jharkhand State Electricity Distribution Company
through its Secretary, PO- Dhurwa, PS- Jagarnathpur,
District- Ranchi
3. The Electrical Superintending Engineer, Electric
Supply Circle, Ranchi, PO- Dhurwa, PS- Jagarnathpur,
District- Ranchi
4. The Electrical Executive Engineer, Electric Supply
Division, Ranchi West, Badri Bhawan, Ratu Road,
Ranchi, PO- Hehal, PS- Sukhdeo Nagar, District-
Ranchi
5. The Assistant Electrical Engineer, Electric Supply
Sub-Division, Ratu Chatti, PO- Hehal, PS- Sukhdeo
Nagar, District- Ranchi
6. The State of Jharkhand
...... Respondents
CORAM: THE HON'BLE MR. JUSTICE VIRENDER SINGH, CHIEF JUSTICE
THE HON 'BLE MR. JUSTICE D.N.PATEL
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For the Appellant: Mr. Rajeev Ranjan Tiwary, Advocate For the Respondents: M/s Ajit Kumar, Saket Upadhyay & Shishir Suman, Advocates.
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Order No. 08: Dated 04.12.2014 Per D. N. Patel, J.
1. The writ petition being W.P.(C) No. 2504 of 2014 was preferred by the appellant (original petitioner) for quashing Letter No. 1563/E.S.E./Ranchi dated 25th April, 2014, issued by the Electrical Superintending Engineer, Electric Supply Circle, Ranchi, whereby, he was refused to be provided fresh electricity connection, mainly for the reason that a sum of Rs.43,03,394/- plus Rs. 28,794/- towards the consumption of electricity is due on the same premises. This writ petition preferred by this appellant, has been dismissed by the learned single Judge vide order dated 27 th June, 2014.
2Therefore the Letters Patent Appeal has been preferred by the appellant (original petitioner).
2. FACTUAL MATRIX:
• The premises, in question, where this appellant (original petitioner) is seeking fresh electricity connection, is a cold- storage - commercial premises. This cold-storage is having two chambers, plant room, generator room and two sorting verandah.
• This premises has been obtained by this appellant (original petitioner) on lease for three years and the rent is Rs.15,00,000/- per year, which is subject to increase by 15% after three years. The lessor is Bihar State Cooperative Marketing Union Ltd. whereas the lessee is the present appellant (original petitioner). The said lease agreement has been entered in between the parties on 29 th January, 2014 (Annexure 1 to the memo of Letters Patent Appeal). • Earlier, the lease was given to one Sri Chandra Shekhar Prasad Singh, who has not paid the electricity dues amounting to Rs.43,03,394/- and Rs.28,794/-, after using the same for running the cold-storage.
• Said Sri Chandra Shekhar Prasad Singh was issued the bill dated 22nd October, 2009 along with final assessment order dated 20th September, 2009, but, he has not paid the said amount to the respondent-Electricity Company and filed a writ petition bearing W.P.(C) No. 5593 of 2009 for quashing the final assessment dated 20 th September, 2009 and the bill dated 22nd October, 2009. This writ petition bearing W.P.(C) No. 5593 of 2009 was withdrawn by Sri Chandra Shekhar Prasad Singh on 8th August, 2014 and the respondents have started taking all steps, including the proceedings for auction of the premises, in question, so that the dues of the respondents can be recovered from Sri Chandra Shekhar Prasad Singh.
• The electricity supply of the cold-storage, in question, has been disconnected since long, on account of non-payment of energy charges as also other charges. There was also a case 3 of theft of energy. Delayed payment surcharge is also upon the property, in question.
• The dues of electricity can be recovered as a land revenue and there can also be a recovery of the dues under Bihar & Orissa Public Demand Recovery Act, especially under Section 18 thereof. Thus, the dues are attached with the property and can be recovered as a land revenue.
3. ARGUMENTS CANVASSED ON BEHALF OF THE APPELLANT:
• This appellant (original petitioner) is a separate legal entity, who can sue or can be sued.
• This appellant (original petitioner) is in no way connected with the earlier defaulter viz. Sri Chandra Shekhar Prasad Singh.
• Reliance has been placed upon a decision rendered by Hon'ble Supreme Court in the case of Isha Marbles v. Bihar State Electricity Board & ors., as reported in (1995) 2 SCC 648. • This appellant (original petitioner) is legally entitled to get the electricity connection and is ready and willing to pay the charges of electricity consumption and all such other incidental charges, for getting electricity connection. • In the judgment of the learned single Judge it has been observed that this appellant (original petitioner) is an agent of Bihar State Cooperative Marketing Union Ltd. (lessor) to run and manage the cold-storage, but, this is incorrect, as the present appellant is a lessee of the lessor and not the agent. • The aforesaid aspects of the matter have not been properly appreciated by the learned single Judge and hence, the judgment and order passed by the learned single Judge in W.P. (C) No. 2505 of 2014 dated 27 th June, 2014 deserves to be quashed and set aside and the letter issued by the Electrical Superintending Engineer, Electric Supply Circle, Ranchi, may be quashed and set aside, by allowing the instant Letters Patent Appeal and the writ petition, preferred by this appellant (original petitioner).
4. ARGUMENTS CANVASSED ON BEHALF OF THE RESPONDENTS:
• The premises, in question, is a cold-storage - commercial 4 premises, which is consuming lot of electricity. The lessor viz. Bihar State Cooperative Marketing Union Limited, has given the premises, in question, on lease, initially to one Sri Chandra Shekhar Prasad Singh, who never paid the dues of electricity, as stated herein above to the tune of Rs.43,03,394/- and Rs.28,794/-. Thereafter, notice was issued to the said Sri Chandra Shekhar Prasad Singh, assessment was made and the final assessment order is dated 20 th September, 2009 and the bill was also finalized and was issued on 22 nd October, 2009. Instead of depositing the aforesaid amount, Sri Chandra Shekhar Prasad Singh filed a writ petition bearing W.P.(C) No. 5593 of 2009 before this Court, which was ultimately withdrawn by the said petitioner (Sri Chandra Shekhar Prasad Singh) on 8 th August, 2014. However, the respondents-Electricity Company has not started any proceeding for recovery of the amount. Meanwhile, the property, in question, has been given on lease by the lessor to the present appellant (original petitioner) and as there are dues on the premises, in question, the electricity connection has not been given to the premises, in question. • As per Clause 1 of the agreement between the lessor and lessee, which is at Annexure 1 to the memo of Letters Patent Appeal, the lessee is an agent of the lessor.
• As per Clause 10 of the agreement between lessor and lessee (appellant), the lessee is bound to pay timely all electric consumption or other charges and the lessee shall not leave any amount to be paid on this account on the date of expiry of the lease. Further, at the end of every month, the proof of payment of electricity bill will be produced before the lessor and the lessor shall have option to realize the unpaid bills or other liabilities thereon.
• As per several Clauses of the lease deed, the electricity dues are to be paid by the lessee and if the same are not paid, the lessor can recover the same. The dues upon the premises, in question, with interest etc. is more than Rs.50,00,000/- and, therefore, the electricity connection, which has been disconnected since long, has not been revived by the respondents-Electricity Company, till the electricity dues are 5 paid, vide letter dated 25 April, 2014 (Annexure 3 to the memo th of Letters Patent Appeal), which was under challenge in the writ petition and, thus, no error has been committed by the learned single Judge in appreciating these contentions of the respondents.
• As per the definition of the word "consumer" and as per Section 2(15) of the Electricity Act, 2003, the owner of the premises is also covered by the word "consumer" and, therefore, both lessor as well as lessee are responsible for payment of electricity consumed charges and, therefore also, unless the dues are paid either by the lessee or by the lessor, no fresh connection can been given for the very same cold- storage - the premises, in question.
• The dues of electricity consumption charges can also be recovered as an arrear of land revenue, even by auctioning the premises, in question. Thus, the dues are attached with the property, if not paid by the person/body concerned. The dues can also be recovered under the provisions of Bihar & Orissa Public Demand Recovery Act, 1914, especially as per Section 18 to be read with Section 3(6) and with Clause No. 9-A of Schedule I to the Act, 1914..
• Relying upon a decision, rendered by Hon'ble Supreme Court in the case of Paschimanchal Vidyut Vitran Nigam v. DVS Steels and Alloys Private Limited & ors., as reported in (2009) 1 SCC 210, it is submitted that the distributor of the electricity can stipulate in the terms, subject to which it would supply electricity. It can stipulate, as one of the conditions for supply, that the arrears or dues in regard to the supply of electricity made to the premises when it was in occupation of the previous owner or occupant, should be cleared before the electricity supplied is restored to the premises or a fresh connection is provided to the premises. In the facts of the present case also, there is a condition of the distributor of electricity that unless the earlier dues are paid, there shall be no restoration of the electricity nor shall there be any fresh connection to the same premises. This aspect of the matter has been properly appreciated by the learned single Judge and hence, this Letters Patent Appeal may not be 6 entertained by this Court.
5. REASONS:
(i) It appears that the premises in question, is a cold-storage, which is a commercial premises. The lessor of the said premises is Bihar State Cooperative Marketing Union Ltd., which had given initially the premises, in question, to one Sri Chandra Shekhar Prasad Singh, on lease. This lessee was given electricity connection, who consumed sizable quantity of electricity for running the cold-storage, without paying the electricity consumption charges and ultimately, the electricity connection was disconnected by the respondents. Necessary notices were issued to him. Thereafter, final assessment order was passed against the said lessee on 20 th September, 2009 and thereafter, the final bill was issued to him on 22 nd October, 2009. This amount was not paid by the said lessee and he preferred W.P.(C) No. 5593 of 2009 before this High Court, which was ultimately withdrawn by the said lessee on 8 th August, 2014. The amount of electricity consumption charges is at Rs.43,03,394/- and at Rs.28,794/-.
(ii) Thereafter, the same lessor viz. Bihar State Cooperative Marketing Union Ltd. has given the very same premises viz. the cold-storage to another lessee, who is the present appellant (original petitioner). Still the dues are unpaid and, therefore, electricity connection has not been given to the new lessee for the same cold-storage and the notice was issued by the respondents that unless the earlier dues are paid, no electricity connection will be given. This letter was issued by the respondents on 25th April, 2014, which was challenged by the present appellant (original petitioner) before this Court by way of a writ petition and the same having been dismissed, the present appeal has been preferred.
(iii) Thus, it appears that sizable amount towards electricity consumption charges has remained unpaid and, therefore, the electricity connection has not been given. The argument canvassed by the learned counsel for the appellant is that he is not concerned with the earlier defaulter nor the earlier electricity was consumed by this appellant and, therefore, he is 7 not liable to make payment of the earlier. This attractive argument is not accepted by this Court, mainly for the reasons that:
(a) The respondents-Electricity Company is wholly owned, managed and controlled by the State Government and, therefore, it is an instrumentality of the State Government. In fact, it is one of the departments of the State Government, but, only for the administrative convenience, it has been separated as Electricity Company. The dues of the respondents are public dues, which can be recovered as an arrears of land revenue and, therefore, the dues are connected with the property, if the defaulter is not making payment of the dues.
(b) The earlier lessee, namely, Sri Chandra Shekhar Prasad Singh, had not paid the dues of electricity, which has accumulated to the tune of Rs.43,03,394/- plus Rs.28,794/- (as mentioned in the letter of the respondents dated 25 th April, 2014, which was challenged in the writ petition). If the dues are not paid by the earlier lessee, automatically the dues can be recovered by auction of the said premises.
(c) It is also the duty of the consumer to make payment of the electricity dues. The word "consumer" is defined under Section 2(15) of the Electricity Act, 2003 and the definition of the word "consumer" reads as under:
"2. Definitions.- In this Act, unless the context otherwise requires,-
xxx xxx xxx (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) In view of the aforesaid definition, the consumer includes the occupier of the premises as well as the owner of the premises. In the facts of the present case, it includes both, the lessee and the lessor (the occupier and the owner of the premises, in question).
(d) Whenever any governmental dues are not paid by 8 any person, it can always be recovered from the property, either by sale of the property or sale of the lease hold rights for the remaining period of lease, Here, as stated above, "consumer" includes the owner of the premises, which is lessor in this case, namely, Bihar State Cooperative Marketing Union Ltd. Its property viz. the cold-storage, in question, can be auctioned by the respondents-Electricity Company, if the dues towards the consumption of electricity are not paid.
(e) If the arguments of the learned counsel for the appellant (original petitioner) is accepted, then every time some lessee will come into picture, will consume sizable electricity for running cold-storage, will not pay the electricity dues and will run away as a defaulter. Thereafter, the claver lessor will lease out the very same property to a second lessee, who will also consume sizable electricity, will not pay the huge electricity consumed charges and will run away as a defaulter, as a second lessee and again the lessor will give on lease the very same property to a third lessee and similar will be the modus operandi for the third lessee also. He will also consume sizable electricity, will not pay the electricity consumed charges and will run away as a defaulter and again the forth lessee will enter into the very same premises. Thus, the electricity will be consumed continuously for the very same premises and one by one the defaulter will run away and a lot of public money will remain unpaid. This situation cannot be allowed where rule of law is prevailing. Supply of electricity is sale of goods. Seller (supplier of electricity) can always stipulate as a condition of sale, that earlier dues for supply of electricity to the same premises, must be cleared. Such condition of sale of electricity is not under challenge. It is not contended that such condition is arbitrary or unreasonable. Therefore, the argument canvassed by the learned counsel for the appellant (original petitioner) is not accepted by this Court.
(iv) The respondents-Electricity Company has a condition for re-connection of the electricity or for grant of fresh electricity connection for the premises, in question, that the earlier dues for the premises, in question, has to be paid. This condition is a 9 valid condition, as has been held by Hon'ble Supreme Court in the case of Paschimanchal Vidyut Vitran Nigam v. DVS Steels and Alloys Private Limited & ors. (supra), paragraph nos. 11, 12, 13, 14 and 15 whereof read as under:
" 11. The supply of electricity by a distributor to a consumer is "sale of goods". The distributor as the supplier, and the owner/occupier of a premises with whom it enters into a contract for supply of electricity are the parties to the contract. A transferee of the premises or a subsequent occupant of a premises with whom the supplier has no privity of contract cannot obviously be asked to pay the dues of his predecessor-in-title or possession, as the amount payable towards supply of electricity does not constitute a "charge" on the premises. A purchaser of a premises, cannot be foisted with the electricity dues of any previous occupant, merely because he happens to be the current owner of the premises. The supplier can therefore neither file a suit nor initiate revenue recovery proceedings against a purchaser of a premises for the outstanding electricity dues of the vendor of the premises in the absence of any contract to the contrary.
12. But the above legal position is not of any practical help to a purchaser of a premises. When the purchaser of a premises approaches the distributor seeking a fresh electricity connection to its premises for supply of electricity, the distributor can stipulate the terms subject to which it would supply electricity. It can stipulate as one of the conditions for supply, that the arrears due in regard to the supply of electricity made to the premises when it was in the occupation of the previous owner/occupant, should be cleared before the electricity supply is restored to the premises or a fresh connection is provided to the premises. If any statutory rules govern the conditions relating to sanction of a connection or supply of electricity, the distributor can insist upon fulfillment of the requirements of such rules and regulations. If the rules are silent, it can stipulate such terms and conditions as it deems fit and proper to regulate its transactions and dealings. So long as such rules and regulations or the terms and conditions are not arbitrary and unreasonable, courts will not interfere with them.
13. A stipulation by the distributor that the dues in regard to the electricity 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.
14. We do not find anything unreasonable in a provision enabling the distributor/supplier to disconnect electricity supply if dues are not paid, or where the electricity supply has already been disconnected for non-payment, insist upon clearance of arrears before a fresh electricity connection is given to the premises. It is obviously the duty of the purchasers/occupants of premises to satisfy themselves that there are no electricity dues before purchasing/occupying a premises. They can also incorporate in 10 the deed of sale or lease, appropriate clauses making the vendor/lessor responsible for clearing the electricity dues up to the date of sale/lease and for indemnity in the event they are made liable. Be that as it may.
15. In this case, when the first respondent, who was the purchaser of a sub-divided plot, wanted a new electricity connection for its premises, the appellant informed the first respondent that such connection will be provided only if the electricity dues are paid pro rata. They were justified in making the demand. Therefore, it cannot be said that the collection of Rs 8,63,451 from the first respondent was illegal or unauthorised. It is relevant to note that when the said amount was demanded and paid, there was no injunction or stay restraining the appellant from demanding or receiving the dues."
(emphasis supplied) In view of the aforesaid decision, if there is any arrears of the electricity charges, to be paid by the previous owner/occupant, it should be cleared by the subsequent owner or occupant and thereafter only, the electricity can be restored or fresh electricity connection can be given.
(v) The electricity dues can also be recovered under the provisions of Bihar & Orissa Public Demand Recovery Act, especially as per Section 18 thereof. In the facts of the present case, the earlier lessee, namely, Sri Chandra Shekhar Prasad Singh, who is a defaulter, was given necessary notices. Assessment order was passed on 20th September, 2009. Thereafter, the bill was also issued on the basis of the assessment order on 22nd October, 2009, but, instead of making payment of the said dues, the said lessee, namely, Sri Chandra Shekhar Prasad Singh had preferred a writ petition before this Court bearing W.P.(C) No. 5593 of 2009 and ultimately the said writ petition was withdrawn by the said lessee-writ petitioner-Sri Chandra Shekhar Prasad Singh on 8 th August, 2014. In fact, immediately steps should have been taken by the respondents- Electricity Company for recovery of the said amount, but, they have yet not started the recovery process, which is legally known as "certificate case". The respondents-Electricity Company should have shown indulgence, as quick actions are required, otherwise the lessor of the premises, in question, will give fresh lease to another lessee, as has happened in this case, and the new lessee will demand the new electricity connection.
(vi) It ought to be kept in mind by the respondents-
11Electricity Company that the electricity dues are public dues, which ought to be recovered as early as possible. During the course of argument, learned counsel for the respondents has submitted that in several cases, huge amount of electricity dues have not been recovered by the respondents and the figure of un-recovered amount is more than Rs.10,000,00,00,000/- (rupees ten thousand crores). It ought to be kept in mind by the Government Companies, especially Public Utility Service Providers that the dues of these Public Utility Service Providers must be recovered at the earliest. Too much lethargic approach on the part of these Public Utility Service Providers may tantamount to conspiracy e.g. huge amount running into several lakhs if not recovered by the Electricity Company, which is wholly owned by the Government, or e.g. Municipalities etc., in connivance with the defaulters, for a longer time, may tantamount to conspiracy, which leads to not only civil liability, but, also may tantamount to an offence.
We, therefore, direct the respondents to file an affidavit as to who are the defaulters in the State of Jharkhand of non- payment of electricity charges (for consumption of electricity, for non-payment of surcharge, for non-payment of electricity taxes etc.). A table will be prepared as under, in the affidavit to be filed by the Chairman of respondent no.1:
Sl. Name of Since Principal Interest What actions Is there any litigation Is there any Whether Ele. No. defaulter when amount if any initiated by pending before any stay for Company has person/sole dues to be paid charged Ele. Company authority/ tribunal/ recovery of preferred any proprietor/ are for recovery arbitrator/ court ? dues? If yes, review/ partnership unpaid of unpaid Number of said date of order. modification or firm/ dues litigation and name appeal/ petition company of authority/ tribunal/ against stay arbitrator/court where granted.
the matter is pending This Affidavit shall be treated as a material for the Public Interest Litigation, by this Court.
The affidavit shall be filed on or before 31st January, 2015. Registrar General of this Court is directed to place the affidavit to be filed in the aforesaid manner along with copy of the order of this Court in this Letters Patent Appeal, so that upon looking to the affidavit, this Court may take suo motu cognizance of Public Interest Litigation.12
6. In the aforesaid peculiar facts of the present case viz. the agreement between the Electricity Service Provider and the new consumer, unless the dues are paid, no re-connection or new connection will be given. Moreover, looking to the fact that the word "consumer", as defined in Section 2(15) of the Electricity Act, 2003, includes the lessee as well as lessor and also looking to the peculiar facts of the present case that the electricity dues can be recovered as an arrear of land revenue and also looking to the special facts of the present case that the public dues of the respondents-Electricity Company can be recovered under Section 18 of the Bihar & Orissa Public Demand Recovery Act and further, looking to Clauses 1, 9 and 10 of the lease agreement between the lessor and the lessee, it makes the present case different from the facts of the case, mentioned in Isha Marble (supra) and hence, the appellant is not entitled to the relief of quashing the letter of Electrical Executive Engineer, Electric Supply Circle, Ranchi dated 25 th April, 2014 (Annexure 3 to the memo of Letters Patent Appeal).
7. Thus, we see no error committed by the learned single Judge in appreciating the aforesaid facts, reasons and judicial pronouncements. The learned single Judge has rightly dismissed the writ petition being W.P.(C) No. 2505 of 2014 and, thus, we see no reason to deviate from the conclusions, arrived at by the learned single Judge. Therefore, there being no substance in this Letters Patent, the same is hereby dismissed.
(Virender Singh, C.J.) (D.N. Patel, J.) A.K.Verma/N.A.F.R.