Orissa High Court
Anshuman Behera vs Orissa State Financial Corporation on 17 February, 2009
Equivalent citations: AIR 2010 ORISSA 10, 2010 (2) AIR KAR R 159, 2010 AIHC NOC 291, (2009) 107 CUT LT 760
Author: B.S.Chauhan
Bench: B.S.Chauhan
HIGH COURT OF ORISSA: CUTTACK O.J.C. No. 11428 OF 2001 An application under Articles 226 and 227 of the Constitution of India.
Anshuman Behera ......... .. Petitioner
--Versus--
Orissa State Financial Corporation 85 others .......... .. Opp. Parties Refifion? 1 M/sM.Mishra, P.K.Das, D.Mishra V 4 "andPIK'.N'anda. 2' 2 2' ' M/ s Miss S.L.Pattnaik, D.Sha 81;
F O . N.1 or pp party 0 S.Nayak For Opp. Parties 2, 3 &; 4: M/s.B.K.Nayak, J.K.Khuntia,
- S.S.Patra 85 D.K.Mohan1:y, PRESENT:-
THE HON'BLE CHIEF JUSTICE DR.B.S.CHAUHAN ~ &.
THE HON'BLE MR. JUSTICE 1. MAHANTY.
Date of hearing as Judgment : 17. 02.2009 I.Mahanty,J. In the present writ application the petitioner has sought for quashing the letter dated 7.8.200lissued by the Executive Engineer (Electrical) Western Electrical Supply Company of Orissa Ltd., Sambalpur Electircal division, Sambalpur under which the opposite parties have sought to deny granting fresh power connection (Electricity) to the petitioner unless petitioner deposits the outstanding dues of the earlier occupant of the premises.
2. The petitioner is a small scale entrepreneur who purchased one industrial unit on auction held by the Orissa Financial Corporation (in short OSFC) under Section 29 of the S.F.C. Act, 1951. On purchasing of the said industrial unit thepetitioner applied to opposite party No.2 the Executive Engineer(Electrical) Western Electrical Supply Company, Sambalpur for grant of fresh power connection, but the same was not » granted to him and turned down by letter 7.8.2001 under Annexure--3 to the Writ application purportedly on the ground that the earlier entrepreneur namely, Bhupesh Bhusan Sahani had an out standing of electricity dues of Rs.1,09,264-70 and accordingly directed the petitioner to deposit the said arrear dues for consideration of his application for fresh power connection to his premises.
3. The learned counsel for the petitioner submitted that the petitioner being an auction purchaser, purchased the property from the Orissa State Financial Corporation through a statutory sale under Section 29 of the SFC Act, 19S1 and was not obliged in law to pay the outstanding electricity dues of the earlier entrepreneur and opposite party no.3 the Executive Director should not in law be permitted to saddle the petitioner with the 'liability of the earlier entrepreneur, as a pre-condition for consideration of the application for fresh power connection in his favour. In this respect learned counsel for the petitioner submitted that the aforesaid proposition of law is no longer res integra and has been settled by this Court in the case of Ajay Kumar Agrawal Vs. O.S.F.C. & Ors., 2006 (Supp.--II) OLR 407 whereby this Court while taking into consideration the earlier judgments of the Hon'ble Supreme Court in M] s. Isha Marbles Vs. Bihar State Electricity Board 8:. Anr., (1995) 2 SCC 648 ; and Ahmedabad Electricity Company Ltd. Vs. Gujarat Inns Pvt. Ltd. 85 Ors., AIR 2004 SC 2171, had came to conclude that in Isha Marbles case similar to the present petitioner, was also auction of the mortgaged assets in an open auction held by the Corporation. The question in Isha Marbles was whether the electricity dues of the previous owner, which is a contractual liability between the previous owner and the Electricity Board can be fastened on to the subsequent purchaser ? Hon'ble Supreme Court in the case of Isha Marbles referred to various provisions , of the Indian Electricity (Supply) Act, 1948 and came to hold that the auction purchaser who came to purchase the property after disconnection. Therefore, the subsequent purchaser could not consume electricity in the same premises till a new contract is entered into and therefore came to hold that it would not be permissible for the electricity company to fasten the liabilityof the previous contracting party against the auction purchaser(who is a third party) and is in no way connected with previous owner/ occupier. Accordingly, learned counsel' for the petitioner submitted that the present case is squarely covered by the judgment of this Court in the case of Ajay Kumar Agrawal (supra) therefore the demand made by the opposite party (WESCO) on the petitioner to clear the outstanding arrear of the previous entrepreneur may be quashed) and direction may be issued to them to grant fresh power connection to the petitioner company to operate his entrepreneur.
4. In Dakshin Haryana Bijli Vitran Nigam Ltd. Vs. Paramount Polymers (P) Ltd., AIR 2007 SC 2, the Apex Court held that there is a distinction in making the application for re-supply of electricity on the old connection taken by the previous consumer and grant of new (licence applied by the purchaser of the property. In case there is a prohibition under the Rule that electricity cannot be restored unless payment of the outstanding dues of the earlier occupier is not paid, reconnection is not permissible. However, the present case is quite different Where the new connection is being applied by the purchaser.
5. Mr. B.K.Nayak, learned counsel appearing for opposite parties 2 and 3 (WESCO) fairly submitted that while the facts of the present case are covered by the judgment in the case of Ajay Kumar Agrawal (supra) but in an later judgment of the Hon'ble Supreme Court in the case of Paschimanchal Vidyut Vitran Nigam Limited as Ors. Vs. DVS Steels and Alloyas Private Limited as Ors., (2009) 1 SCC 210, the Hon'ble Supreme Court came to hold that although in the absence of a contract to the contrary, the electricity supplier cannot recover the dues of earlier predecessor--in--title or possession from the subsequent purchaser since there is no privity of contract. It further came to hold that the supplier can impose such terms and conditions to regulate its transaction which are not arbitrary and unreasonable.
6. In this respect learned counsel for the petitioner strongly relied upon the observations of the Hon'ble Supreme Court contained in paragraph 12 of the aforesaid judgment to the following effect:
"12. xx xx xx If any statutory rules govern the conditions relatinglwtomslanctiori of lawclionnelctioln or lslumplplylofl 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."
7. Accordingly, Sri Nayak when asked to point out whether any rules or regulations are in existence permitting/ enabling opposite party No.3 to demand arrears of the earlier entrepreneur in title. Sri Nayak placed reliance upon Clause 13(3) and (10) of the Orissa Electricity Regulatory Commission Distribution (Conditions of supply) Code, 2004. The same is extracted herein.
" 13(3) No additional power shall be supplied by licensee unless all arrear charges for the existing power supply have either been paid in full or paid in accordance with an installment facility granted by the licensee for unconditionally paying the arrears within the stipulated time.
13( 10) (a) Subject to the Regulation 8, the transfer of service connection shall be effected within 15 days from the date of receipt of complete application.
(b) The service connection from the name of a person to the name of another consumer shall not be transferred unless the arrear charges pending against the previous occupier are cleared.
Provided that this shall not be applicable when the ownership of the premises is transferred under the provisions of the State Financial Corporation Act."
8. On consideration of the submissions made by the learned counsel appearing for the respective parties, we find that in the case of Paschirnanchal Vidyut Vitran Nigam Limited (supra) reference has been made to" --any earlier judgments e-of-- the --Hon'ble* Supreme -«Courtmon -- the selfsame issue but more particularly in paragraph- 11 of the judgment their Lordships have held:
"11. xx xx 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."
9. Further we find that Clause 13(3) of the Orissa Electricity Regulatory Commission Distribution (Conditions of supply) Code, 2004 has no application to the present case, inasmuch as,' the present case is not a case where any "additional power" is sought for being supplied to the petitioner and in the absence of such a fact situation no question of clearing the earlier arrear charges of any existing power supply arises for consideration. Similarly Clause" 13(l0)(b) also has no application to the facts of the present case, inasmuch as, the petitioner has not sought for ' "transfer of the existing service connection" in its favour but has instead made an application for being granted a "fresh connection". What is most important is to take note of the proviso to Clause 13(lO) of the Orissa Electricity Regulatory Commission Distribution (Conditions of supply) Code, 2004 which states that, the aforesaid provision would not be applicable when the ownership of the premises is transferred under the provisionskof £5; at :.~;.......;..1ci.;.,.;.....;;.; Act, 1951. i'li'1'1Zelrefore,fl it}; absolutely clear that in the facts of the present case where the applicant- petitioner has been transferred ownership of the premises under section 29 of the State Financial Corporation Act, 1951, though a public auction this clause of the Orissa Electricity Regulatory Commission Distribution (Conditions of supply) Code, 2004 can have no application to whatsoever.
"Therefore, in consideration of the above noted facts, case laws and law on the subject we have no other option other than to quash Annexure-3 dated 7.8.2001 to the Writ petition and to direct opposite parties 2 and 3 to grant a "fresh power connection" forthwith in favour of the petitioner by complying with all other procedural formalities in accordance with law without insisting him to pay the arrear dues of his predecessor entrepreneur. _ Unless it can be shown that there is a charge on the property, the purchaser cannot be held responsible for making the payment of the outstanding dues of the earlier occupier.
10. Accordingly, the writ petition is allowed, but in the circumstances there shall be no order as to costs.
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ORISSA HIGH COURT; CUTTACK 17th February, 2009 /AKD '