Gujarat High Court
Bheruji Estate vs O.L. Of Shree Ambica Mills Ltd. on 8 April, 2005
Author: K.A. Puj
Bench: K.A. Puj
JUDGMENT K.A. Puj, J.
1. The applicant, namely, Bheruji Estate has taken out this Judge's Summons seeking direction to the respondent No. 2 i.e. G.E.B. to provide a temporary connection in the premises of Ambica Mills Limited, Jetalpur Road, Vadodara which is purchased by the applicant in the auction held by this Court.
2. One Mr. Chunilal K. Shah, Proprietor of the applicant Firm has filed affidavit in support of the Judge's Summons wherein it is stated that this Court (Coram :- K.M. Mehta, J.) vide order dated 23.12.2003 has confirmed the sale of land being City Survey No. 1297 and 1298 both admeasuring 39,011.03 Sq. Mtrs. of Shree Ambica Mills Limited (In Liquidation), Vadodara in favour of the applicant for Rs. 8.60 Crores. The entire payment of Rs. 8.60 Crores has been made to the O.L. as recorded in the subsequent proceedings before this Court. The O.L. has addressed a letter dated 12.03.2004 informing the applicant to take the possession of the land of Shree Ambica Mills Limited (in Liquidation). As the total area of construction would be more than 3,50,000 Sq. feet, the total requirement of power supply would be more than 2,500 Kilo Watts. However, in order to enable the applicant to commence construction activity, the applicant required temporary electric connection of 30 Kilo Watts. Therefore, the applicant had made an application before the G.E.B., Vadodara for release of temporary power supply of 30 Kilo Watts only on 04.04.2004 along with necessary documents. Since there was no response from the respondent No. 2 as regards the temporary connection, the applicant wrote another letter on 03.05.2004 to the Executive Engineer of the respondent No. 2 stating that neither any communication nor any estimate has been received from the Board with respect to the application made by the applicant. The applicant thereafter wrote another letter on 14.05.2004 to the Chief Engineer of the respondent No. 2 Board requesting to release the temporary power supply and also gave an assurance that before getting the permanent connection, the arrears of the Board pending from M/s. Ambica Mills Limited would be resolved. There was no response from the respondent No. 2 Board even in pursuant to the said letter of the applicant. The applicant has also addressed a letter to the Chairman of the respondent No. 2 Board seeking appointment regarding release of the temporary connection on 28.05.2004 and in response to the said letter, the applicant was informed that as per condition No. 2 (j) inserted in the Conditions and Miscellaneous Charges for Supply of Electrical Energy, it is not possible to satisfy the demand of catering of power supply in the said premises as there are arrears of the respondent No. 2 pending from M/s. Ambica Mills Limited (in liquidation).
3. The Court has issued notice on 31.08.2004. The O.L. appeared on behalf of the respondent No. 1 Company and Ms. Lilu K. Bhaya, learned advocate appeared for respondent No. 2 - G.E.B.
4. Mr. S.N. Soparkar, learned Senior advocate appearing for the applicant has submitted that as per the order passed by this Court (Coram :- Kundan Singh, J. ) dated 19.06.2003 in the case of SONA CO-OPERATIVE HOUSING SOCIETY LTD. v. GUJARAT ELECTRICITY BOARD and Ors., [2003] 44 (3) G.L.R. 2234, the condition No. 2 (j) is declared as illegal, unreasonable, arbitrary, ultra vires and against the provisions of law and is struck down.
5. Mr. Soparkar has further invited the Court's attention to the Circular issued by the Gujarat Government Industrial Mine Department on 07.02.2004 wherein it is stated that neither any institute or department shall recover the amount due from the previous owner, from the auction purchaser in respect of the property purchased in auction. It is further stated that property purchased in auction would not be liable to any attachment. The State Government has also made it clear that the Gujarat Electricity Board shall have right to recover the outstanding amount with interest from the original owner of the property purchased by the auction purchaser. Based on this circular, Mr. Soparkar has submitted that the respondent No. 2 Board is not entitled to recover the amount of arrears from the erstwhile owner of the property of the Company in liquidation.
6. Despite this fact, he has submitted that the applicant at present requires temporary power supply of 30 Kilo Watts for the construction activity and as regards the arrears of the respondent No. 2 Board is concerned, before taking the permanent connection of electricity from the respondent No. 2, the arrears will be paid of. He has, therefore, submitted that the action of the respondent No. 2 in not releasing the power supply even on temporary basis is absolutely illegal and unreasonable.
7. Ms. Lilu K. Bhaya, learned advocate appearing for the respondent No. 2 has relied on the reply filed by G.E.B. on 04.10.2004. With regard to the judgment dated 19.06.2003 in the case of SONA CO-OPERATIVE HOUSING SOCIETY LTD. v. GUJARAT ELECTRICITY BOARD AND Ors. (SUPRA), Ms. Bhaya has submitted that the respondent Board has preferred L.P.A. No. 691 of 2003 before the Division Bench of this Court and the said appeal has already been admitted and stay was granted. She has further submitted that so far as releasing connection either temporary or permanent is concerned, the respondent No. 2 cannot release the connection unless the amount due from the earlier consumer is paid by the applicant. For this purpose, she has invited the Court's attention to the condition No. 2 (j) of the Conditions and Misc. Charges for Supply of Electrical Energy which is applicable to consumer / person who applies for connection to the respondent No. 2 Board. The condition No. 2 (j) is statutory in nature and the same has been framed in exercise of the powers conferred upon it under Section 49 of the Electricity (Supply) Act, 1948 and has been incorporated in the Conditions and Misc. Charges for supply of Electrical Energy by way of an additional condition No. 2 (j) in the said conditions after giving public notice. The said public notice was published in the leading Newspapers for the information of the public at large. As per this condition No. 2 (j), the application for reconnection or new connection from the successor or occupier of the premises where there are arrears of the Board pending from the old consumer / occupier shall be processed only after the receipt of the full payment from such applicant against all accumulated dues of the processor's connection holder. At the time when the applicant applied for connection at the premises of M/s. Shree Ambica Mills Ltd., there was arrear of the respondent Board and hence, the respondent Board is not in a position to give any temporary connection to the applicant.
8. She has further submitted that the ratio laid down by the Hon'ble Supreme Court in the case of ISHA MARBLES v. BIHAR STATE ELECTRICITY BOARD AND Anr., 1995 (2) S.C.C. 648, will not come in the way of the respondent No. 2 Board. At the time when the above case was decided by the Hon'ble Supreme Court, the condition No. 2 (j) was not in existence. She has further submitted that since the connection of the previous consumer M/s. Shree Ambica Mills Ltd. was permanently disconnected, all necessary Cables, wires and other infrastructures were removed from the site and now the respondent Board is required to spend huge amount for giving connection to the applicant at the said premises. When the consumer applies for connection and the Board gives such connection for supply of electricity, there is a contract between the two parties and the parties to the Contract are bound by the conditions of the Contract. According to the conditions of supply, the respondent Board has insisted the applicant to pay the entire amount and unless and until this payment is made, no question of supply of electricity either temporarily or on permanent basis would arise.
9. Ms. Bhaya has further relied on the judgment of this Court (Coram :- R.R. Tripathi, J.) delivered in S.C.A. No. 11117 of 2001 on 27.12.2001 directing the petitioner therein to deposit the entire amount inclusive of the dues of the previous consumer. She has further relied on the decision of this Court delivered in S.C.A. No. 8078 of 2001 in the case of M/s. Khodiyar Industries and also in S.C.A. NO. 6104 of 2002 directing the petitioners in those cases to pay the entire amount of arrears of the previous consumer as a condition to get the electricity connection. She has further relied on the decision of the Hon'ble Supreme Court in the case of HYDERABAD VANASPATHI LTD. v. ANDHRA PRADESH STATE ELECTRICITY BOARD, 1998 (4) S.C.C. 470 wherein it is held that Section 49 does not require the Board to enter into a contract with individual consumer. Even in the absence of an individual contract, the terms and conditions of Supply notified by the Board will be applicable to the consumer and the consumer will be bound by them. In order to avoid a possible plea by the consumer that he had no knowledge of the terms and conditions of Supply, agreements in writing were entered into with each consumer, but that will not make the terms purely contractual. The Board in performance of its statutory duty supplied energy on certain specific terms and conditions framed in exercise of a statutory power. Undoubtedly, the terms and conditions are statutory in character and cannot be said to be purely contractual.
10. She has further relied on the decision of the Kerala High Court in the case of SEENA B. KUMAR v. ASST. EXECUTIVE ENGINEER, ELECTRICAL MAJOOR SECTION, MAVELIKKARA, A.I.R. 1998 KERALA 343 wherein the premises in question was purchased in a public auction and connection in the same premises was disconnected for the non-payment of the arrears by the previous occupier and for reconnection, the applicant had applied. But the Board had refused on the ground of non-payment of arrears. The Kerala High Court has held that it is not illegal since the Board has a legal right under the regulations to recover the amount from the new consumer. The Kerala High Court has considered in the said judgment, the case of Isha Marbles (Supra) and distinguished by saying that this condition to recover dues of the earlier consumer had been amended and is a part of the terms and conditions for supply which was not there in the earlier case before the Hon'ble Supreme Court.
11. She has further relied on the decision of Kerala High Court in the case of A. RAMCHANDRAN v. KERALA STATE ELECTRICITY BOARD AND Ors., A.I.R. 2001 KERALA 51 and also in the case of K.J. DENNIS AND ETC. v. OFFICIAL LIQUIDATOR, KOCHI AND Ors., A.I.R. 2001 KERALA 380 wherein the Court has taken the view that denial by Board to supply electric energy to premises where there is arrear due to non-payment by the occupier in accordance with the regulations of the Board cannot be said to be illegal or arbitrary. She has, therefore, submitted that the respondent Board is under statutory obligation to supply electrical energy to any person whenever requisition is made subject to the fulfillment of the condition under Clause 6 of Schedule I of the Act. Section 24 of the Act enables the Board to disconnect the supply against the consumer to whom the energy is being supplied. Under Sections 49 and 79 of the Electricity (Supply) Act, 1948, the Board has framed regulations and under the said regulations, the Board can insist upon the successor / occupier to clear the dues of the previous consumer.
12. Considering the statutory provisions as contained in the Electricity Supply Act as well as the Rules and Regulations framed thereunder and also considering the authorities relied upon by Ms. Bhaya, it is strongly urged that the applicant is not entitled to get any electricity connection even on temporary basis unless and until the dues of the previous consumer are paid.
13. Ms. Bhaya has further submitted that the circular issued by the State Government on 07.02.2004 on which the heavy reliance is placed by the applicant, cannot be made applicable to the facts of the present case as the said circular was issued in the context of exercise of powers by the Gujarat State Industrial Corporation and Gujarat Industrial Investment Corporation under Section 29 of the State Financial Corporation Act. It is made clear in the said Circular that out of the sale proceeds of the properties sold in auction, the amount will be disbursed amongst Gujarat State Financial Corporation, Gujarat Industrial Investment Corporation, Gujarat Sales Tax Department on pro rata basis. The said Circular is not issued in the context of the Company in liquidation as the disbursement of the sale proceeds of the Company in liquidation is governed by the provisions contained in Section 529, 529-A and 530 of the Companies Act, 1956 whereby the Secured Creditors and the Workers are having pari passu charge and if any amount is left after satisfaction of the dues of the Secured Creditors and workers, the dues of the statutory creditor would be paid. The respondent Board, therefore, would not be in a position to recover any amount from the previous owner and unless and until the successor purchaser is directed to pay the amount to the respondent Board by invoking the statutory provisions, the amount would not be recovered. She has, therefore, submitted that the reliance placed on the said Circular is absolutely uncalled for and it would not render any assistance to the applicant.
14. After having heard learned advocates appearing for the respective parties and after having gone through the contents of the affidavit filed in support of the Judge's Summons by the applicant as well as the reply filed by the respondent No. 2 Board and after having perused the relevant statutory provisions and the authorities cited on the subject before the Court, the Court is of the view that there is no much scope for any dispute or discussion that the respondent Board is well within its power to enforce the requirement as laid down in condition No. 2 (j) of the Conditions and Misc. Charges for Supply of Electrical energy as the said conditions are statutory conditions and the Board is under an obligation to press into service the said condition as and when any consumer applies for electricity connection. The said condition does not make any difference as to whether electricity supply is demanded either on temporary basis or on permanent basis. The only aspect which is taken into consideration at the time of giving electricity connection is as to whether the arrears of the G.E.B. have been paid by the consumer in respect of the premises where the electricity connection is sought to be installed. The Board is not concerned as to whether the arrears are outstanding from the previous consumer or from the consumer who has applied for electricity connection. The words which are used in condition No. 2 (j) are such that no application shall be entertained by the Board either for reconnection or new connection for any premises where the arrears of Board are outstanding from the consumers / occupiers. This condition also makes it abundantly clear that new successor or occupier has to clear the dues of the previous consumer before the application of successor / occupier is processed for supply of electricity. Proper care has also been taken at the time when the said condition has been inserted so as to see that the board shall not collect the arrears from the previous consumer as well as from the successor / occupier as it is also made clear in the said condition that if the board at the later point of time gets the full or part of its dues from the previous consumer, in that case, the amount shall be refunded to the successor / occupier after adjusting the cost including the legal expenses to recover such arrears. In view of the provisions made in condition No. 2 (j), the Board is not even entitled to process the application for electricity connection so long as the dues are outstanding. It is true that the above condition has been held as illegal and invalid by this Court in the case of SONA CO-OPERATIVE HOUSING SOCIETY LIMITED v. G.E.B. AND Ors. (SUPRA). However, the said decision has been stayed by the Division Bench of this Court in L.P.A. No. 691 of 2003 and hence, the Board cannot be restrained from invoking the said condition against any successor / occupier who makes an application for electricity connection. Even otherwise, this Court has also directed in number of cases which are relied upon by Ms. Bhaya and are referred to hereinabove, whereby the consumers are directed to pay the entire amount of arrears before getting electricity connection. The request made by the present applicant for electricity connection cannot, therefore, be granted on the face of it.
15. The question, however, still remains to be decided as to whether the applicant's request for temporary connection on full payment in advance for consumption of electricity supply during the temporary period and on furnishing an undertaking to clear the arrears within a stipulated period makes any difference and in such a situation, whether the Court can direct the Board to deviate from invoking condition No. 2 (j). In this connection, the submission made on behalf of the applicant by Mr. Soparkar is required to be seen. In para 5 of the application, the applicant has given an assurance that before getting the permanent connection, the arrears of the Board pending from M/s. Ambica Mills Limited would be resolved. Mr. Soparkar has further given estimate for electricity connection of 30 Kilo Watts which comprises of installation charges of Rs. 1,50,000/- and monthly expected bill of Rs. 25,000/- and if the electricity connection is granted for two years, the expected bill would come to Rs. 6 Lacs. The applicant is ready and willing to pay the entire amount of Rs. 7,50,000/- in advance and if on that basis and after payment of Rs. 7,50,000/- coupled with an assurance and undertaking that the entire arrears would be paid within two years from the date of making an application for permanent electricity connection, whether the Board can be directed to give electricity connection on temporary basis to the applicant. Here some equitable considerations are weighed with the Court. It is an admitted position that the applicant is a businessman. He has purchased the property for development. It is not possible to develop the property without electricity connection. If such temporary connection is granted for the purpose of construction and/or development of the property and an undertaking is obtained from the applicant to clear the arrears within a stipulated period, in the opinion of this Court, there would not be any violation of condition No. 2 (j). It is, however, made clear that on or before development of the property if the applicant transfers the same under any arrangement or to the prospective buyers, and correspondingly fastens the liability of G.E.B. dues on such transferees or prospective buyers, the primary responsibility would be of the applicant as the undertaking is to be filed by the applicant and he will be bound by that undertaking.
16. In view of the above facts and circumstances of the case and in view of the fact that the present application stands on altogether different footing, the Court hereby directs the respondent No. 2 to grant electricity connection purely on temporary basis to the extent of 30 Kilo Watts on receipt of amount of Rs. 7,50,000/and on furnishing of an undertaking before this Court and to the Board that the applicant shall pay the arrears of G.E.B. or resolve this dispute with G.E.B. within two years from the date of making application for permanent connection and such application be made before the expiry of the period for temporary connection. If any breach of this undertaking is committed by the applicant, the respondent No. 2 Board shall be entitled to disconnect the electricity supply forthwith. It is also made clear that this temporary electricity connection is granted for the period of two years and estimate is also prepared on this basis. If however, any more charges are found to be payable for supply of this temporary electricity supply, the respondent No. 2 Board shall be entitled to recover this amount from the applicant. It is also made clear that if the present applicant transfers the property in question to any one else or even after development of the property, allots any shops or offices for commercial purposes or any flats etc. for residential purposes, he will inform to all the prospective buyers about the outstanding arrears of G.E.B. dues. In any case, this arrangement would not affect the right of the G.E.B. to recover its arrears in respect of the property in question, in accordance with law.
17. The respondent No. 2 will grant temporary electricity connection within one month from the date of receipt of the above amount as well as from the date of furnishing the undertaking as directed above.
18. It is incidentally to be observed that this Court has passed an order in Company Application No. 449 of 2004 with Company Application No. 37 of 2005 whereby the O.L. is directed to hand over possession of land admeasuring about 2,77,000 Sq. Feet out of the land and to execute the Sale Deed in favour of Shri Manubhai Maganbhai Patel being the nominee of the applicant and the said parcel of land is also the subject matter of the present application and since the G.E.B.'s dues are in respect of the same land, this order equally applies to the said party and if the electricity connection is required by the said party, it is on the same line and subject to the same terms and conditions which are incorporated here in this order.
19. With this direction and observation, this application is accordingly disposed of without any order as to costs.