Madras High Court
M/S.Omni Fusion Technologies vs The Chairman on 29 April, 2014
Author: D.Hariparanthaman
Bench: D.Hariparanthaman
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 29.04.2014
CORAM
THE HONOURABLE MR.JUSTICE D.HARIPARANTHAMAN
W.P.No.7587 of 2011
M.P.(MD)Nos.1 and 2 of 2011
M/s.Omni Fusion Technologies
Rep. by its Partner,
P.Rajagopalan,
Mathur Village,
Mathur Post Office,
Kulathur Taluk,
Pudukottai District. ... Petitioner
Vs.
1. The Chairman,
Tamil Nadu Electricity Board,
Anna Salai,
Chennai.
2. The Chief Engineer (Commercial),
Tamil Nadu Electricity Board,
No.144, Anna Salai,
Chennai.
3. The Superintending Engineer,
Pudukottai Electricity Distribution Circle,
Pudukottai. ... Respondents
Prayer
Writ Petition filed under Article 226 of the Constitution of India
praying for the issuance of a Writ of Certiorarified Mandamus calling for the
records relating to the impugned proceedings issued by the third respondent in
his proceedings Lr.No.Se/PEDC/PDKT/AO/R/RCS-2C/D.No.207/2009, dated 02.04.2009
and the consequential impugned proceedings issued by the third respondent in
Lr.No.SE/PEDC/PDKT/AO/Rev/RCS-1/D.No.405/09, dated 27.07.2009 and in
Lr.No.SE/PEDC/PDKT/AO/Rev./RCS-1/D. No.534/2009, dated 05.10.2009 and quash the
same as illegal and consequentially to direct the third respondent to provide LT
Electricity Service connection to his land in Survey Nos.11/1B1, 11/2A3B, 11/5,
in Kumaramangalam Village, Viralimalai Panchayat Union, Pudukottai District.
* * *
!For Petitioner ... Mr.Mahaboob Athiff
for M/s.Ajmal Associates
^For Respondents ... Mr.S.M.S.Johny Basha
and Ms.S.Srimathy
Standing Counsel for TNEB
:ORDER
An interesting question that arises for consideration in this writ petition is as to whether the Tamil Nadu Electricity Board, now Tamil Nadu Generation and Distribution Corporation, could insist the buyer of a property, who sought for fresh electricity supply, to clear the dues in respect of electricity connection that existed in the premises on the lands purchased ?
2.0. The petitioner M/s.Omni Fusion Technologies is a partnership firm. The firm purchased the lands to the extent of 6.72 acres in Survey Nos.11/1B1, 11/2A3B, 11/5, in Kumaramangalam Village, Viralimalai Panchayat, Pudukottai District, from the erstwhile land owners by way of two registered sale deeds dated 24.07.2007. The purchase was made to establish worksite for the firm.
2.1. The petitioner sought for Electricity Service Connection for their worksite by way of application to the Tamil Nadu Electricity Board (hereinafter referred to as "the Board")/the third respondent in April 2009. The third respondent passed the impugned proceedings dated 02.04.2009 rejecting the application for new power supply connection on the ground that since the High Tension Service Connection (for short "HTSC")No.48 of M/s.Balaji Steels was disconnected due to the non-settlement of outstanding dues of Rs.41,59,619/- upto April 2009, new power supply to the same campus, where the power was disconnected, as stated above, was not feasible.
2.2.The petitioner, again, made a representation on 19.05.2009 to the third respondent that they were not aware of the said dues and the firm is completely a different entity in the eye of law and that the firm is a bonafide purchaser of the property and hence, requested the third respondent to reconsider the decision and to give new power supply to their firm.
2.3. This request was also rejected by the third respondent stating that two erstwhile consumers, namely, M/s.Balaji Steels (HTSC No.48) and M/s.Subhadra Alloys (HTSC No.52) had to pay arrears of consumption charges of Rs.82.19 lakhs to the Board upto 31.07.2009 and the supply was disconnected to those HTSCs due to the arrears and since the petitioner firm purchased the premises/campus, where the HTSCs was disconnected for non-payment of huge arrears, new supply cannot be effected until the arrears, referred to above, are settled.
2.4. Again the petitioner firm made another representation to the third respondent in this regard. The same was also rejected by the third respondent by its order dated 05.10.2009 reiterating its earlier orders. 2.5. In these circumstances, the petitioner filed this writ petition seeking to quash the orders of the third respondent dated 02.04.2009, 27.07.2009 and 05.10.2009 as illegal and to direct the third respondent to provide LT Service Connection.
3.0. The third respondent filed counter-affidavit stating that one M/s.Balaji Steels obtained HTSC No.48 through the agreement dated 21.09.1991 and operated their industry in S.No.11/2A/3 of Kumaramangalam Village, Viralimalai Panchayat, Pudukottai District. One M/s.Subhadra Alloys also obtained HTSC No.52 through the agreement dated 11.06.1991 and operated their industry in S.No.11 of Kumaramangalam Village, Viralimalai Panchayat, Pudukottai District. In respect of HTSC No.48, the outstanding dues to the Board upto June 2011 was Rs.49,24,707/- and in respect of HTSC No.52, it was Rs.46,78,020/-. 3.1. The petitioner firm purchased the property, wherein, the above two HTSC consumers operated their industries, by way of sale deed dated 24.07.2007.
3.2. As per Clause 6.10 of the Terms and Conditions of Supply of Electricity of Tamil Nadu Electricity Board (for short "Terms and Conditions"), the Board is entitled to refuse supply to the intending consumer without clearing the dues attached with the premises.
3.3. A similar clause 17(9) of the Tamil Nadu Electricity Supply Code also provides such power to the Board. The third respondent extracted Clause 17(9) of the Code in this regard.
3.4. It was pleaded that the entire property, on which, M/s.Balaji Steels and M/s.Subhadra Alloys were operated, was purchased by the petitioner firm. It was also stated that the petitioner themselves admitted that they purchased 6.72 acres of land in sub divided portion of Survey No.11. It was further stated that the petitioner is duty bound to verify the dues of his vendors before purchasing the property. There are disputed questions of facts involved in this writ petition and therefore, this writ petition deserves to be dismissed.
4. Heard both sides.
5.0. The learned counsel for the petitioner contended that when the impugned orders were passed, the Clause 6.10 of the Terms and Conditions was not in operation and the same came to end when the Tamil Nadu Electricity Supply Code, 2004 (hereinafter referred to as "the Supply Code") was issued under Section 50 of the Indian Electricity Act, 2003 (hereinafter referred to as "the Act"). He submitted that the Electricity (Supply) Act was repealed by way of Section 185(1) of the Act and the Terms and Conditions were issued under the repealed Act and hence, the same came to end on the issuance of the Supply Code. Clause 17(9) was incorporated only on 18.03.2011 in the Supply Code and therefore, when the impugned orders were passed, the Board could not insist the petitioner to clear the dues of the vendors for effecting new supply to the petitioner.
5.1. The learned counsel submitted that the Electricity Board could very well proceed against the HT Consumers, namely, the consumers of HTSC Nos.48 and 52 to recover the dues payable by them pursuant to the contractual liability of those defaulters to pay to the Board. In this regard, he relied on the judgment of the Apex Court in (i) Isha Marbles V. Bihar State Electricity Board, (1995) 2 SCC 648 ; and (ii) Haryana State Electricity Board V. Hanuman Rice Mills, Dhanauri and Others, (2010) 9 SCC 145; and he also relied on the judgment of this Court in Shahjahan V. The Superintending Engineer, TNEB & Another, (2012) 4 MLJ 763.
5.2. The purchaser of the property, shall not be denied the electricity service connection on the ground that the property, whereon, the HTSC consumer operated the industries was in default in paying the consumption charges and there has been huge arrears from the vendors.
6.0. On the other hand, the learned Standing Counsel for the Board contended that HT consumers commit default in payment of consumption charges running to crores of rupees and the campuses, on which, those HTSCs were situated, were sold to the purchasers and the purchasers seek fresh service connection as if they have nothing to do with the huge arrears of their vendors to the Board. This results in a huge loss to the Board. According to her, the loss to the Board is the loss to the public property.
6.1. The learned counsel contended that the petitioner firm, before purchasing the vast extent of lands measuring 6.72 acres for industrial purposes, should have been prudent to verify as to whether any electricity dues were payable by the erstwhile consumers, who operated in the lands that were purchased by them.
6.2. She submitted that it was not a purchase of a small house site by an ordinary citizen. Then one can infer that he could not have been aware of the arrears payable by the earlier consumer to the Electricity Board. Even in such cases, the law contemplates that the buyer should be careful before buying a property. Herein, the petitioner is an entrepreneur and purchased a vast extent of land and therefore, the plea that the petitioner was not aware of the dues deserves to be rejected.
6.3. The learned counsel for the Board heavily relied on Clause 6.10 of the Terms and Conditions framed under Section 49 of the Electricity (Supply) Act, 1948. As per the said Clause, the Board could very well refuse new electricity service connection to the premises, if the purchaser failed to discharge the liability of the erstwhile owner of the property. She submitted that Clause 6.10 of the Terms and Conditions is saved under Section 185(2)(a) of the Act and the distraint action taken for recovery is also saved by the provisions of Section 185(2)(a) of the Act. Therefore, it was submitted that there was no vacuum at all, as contended by the learned counsel for the petitioner. Furthermore, she relied on Clause 17(4) of the Supply Code that creates charge on the property purchased by the petitioner towards arrears for the consumption charges to the Board. Later, sub-clause (9) in Clause 17 was inserted in the Supply Code, in 2011 reproducing specifically Clause 6.10 of the Terms and Conditions.
6.4. The learned counsel heavily relied on the judgment of the Apex Court in Dakshin Haryana Bijli Vitran Nigam Ltd V. Paramount Polymers (P) Ltd., (2006) 13 SCC 101 by taking me through the entire judgment and submitted that the said judgment distinguished Isha Marbles V. Bihar State Electricity Board, (1995) 2 SCC 648, relied on by the learned counsel for the petitioner. According to her, in view of Clause 6.10 of the Terms and Conditions and Clause 17(9) of the Supply Code, the judgment of the Apex Court in Dakshin Haryana Bijli Vitran Nigam Ltd's case is applicable within four corners of this case. 6.5. The learned counsel also placed heavy reliance on Paschimanchal Vidyut Vitran Nigam Limited and Others V. DVS Steels and Alloys Private Limited and Others, (2009) 1 SCC 210 and she took me through the entire judgment and she laid emphasis particularly, on paragraphs 12 to 15.
6.6. The learned counsel also relied on the judgment of the Apex Court in Haryana State Electricity Board V. Hanuman Rice Mills, Dhanauri and Others, (2010) 9 SCC 145, while the petitioner also relied on the same. According to her, the view expressed in Dakshin Haryana Bijli Vitran Nigam Limited's case, (cited supra) and Paschimanchal Vidyut Vitran Nigam Limited's case (cited supra) was reiterated in this judgment.
6.7. She relied on the judgment of a learned Single Judge of this Court dated 27.04.2005 in M.Sheik Dawood represted by his power of attorney Dr.A.Mustafa V. Executive Engineer, TNEB, Madurai Division, Madurai, (W.P.No.2992 of 2004) and the judgment of the Division Bench of this Court dated 17.08.2011 in M.Rukmani V. The TNEB, rep. by its Chairman and Others, (W.A.Nos.1898 and 2189 of 2001), in support of her submissions. According to her, the Division Bench judgment squarely covers the issue. 6.8. The learned counsel sought to distinguish the judgment of the learned Single Judge of this Court in Shahjahan's case on the ground that in the said judgment, the judgments of the Apex Court in Dakshin Haryana Bijli Vitran Nigam Ltd V. Paramount Polymers (P) Ltd., (2006) 13 SCC 101 and Haryana State Electricity Board V. Hanuman Rice Mills, Dhanauri and Others, (2010) 9 SCC 145 were not considered and the findings of the learned Single Judge, according to her, is opposed to the law laid down in paragraphs 12 to 15 of the judgment in Paschimanchal Vidyut Vitran Nigam Limited's case (2009) 1 SCC 210 that was relied on by the learned Single Judge.
6.9. The learned counsel relied on the Tamil Nadu Electricity Board (Recovery of Dues) Act, 1978 (hereinafter referred to as "Recovery of Dues Act"). According to her, even after the sale of the property to the petitioner, proceedings could be continued against the property pursuant to the provisions of this Act.
7. I have considered the submissions made by either side.
8. M/s.Balaji Steels was the erstwhile consumer of the Board as it obtained HTSC No.48. It operated the industry in the premises that was purchased by the petitioner. The HTSC Arrears History Sheet that is produced by the learned counsel for the respondent/Board discloses that the HTSC was disconnected on 31.01.2001 due to non-payment of electricity consumption charges and the agreement with the consumer was terminated on 06.04.2001. As on August 2001, Rs.17,58,824/- was due from the consumer. A notice under Section 3(1) of the Recovery of Dues Act was issued on 11.09.2001. Thereafter, a notice under Section 4 of the Recovery of Dues Act was issued on 15.10.2001. Ultimately, Distraint Order was issued on 22.12.2001. Though the erstwhile consumer, namely, M/s.Balaji Steels, sought for reconnection on payment 40% of the dues and assuring the payment of balance in 10 instalments and such proposal was approved by the Chief Engineer in the Memo No.CE/D/Ty/Accts/A1/033741/2003, dated 06.12.2003 and the same was intimated to the consumer in the letter dated 05.01.2004, the consumer failed to comply with its own proposal. A number of reminders sent by the Board in 2006, 2007 and 2008 went in vain.
9. Likewise, action was taken against M/s.Subhdra Alloys Privated Limited for non-payment of consumption charges and their electricity service connection was disconnected on 01.02.2004 and the amount due was Rs.20,97,767/- as on August 2004. Action was taken under the Recovery of Dues Act. A notice under Section 3(1) of the Recovery of Dues Act was issued on 06.09.2004 and ultimately, distraint order was issued on 16.11.2004. The Board also came to know that the gate of the Consumer premises had been sealed by the SIPCOT authorities for recovery of dues. While so, the consumer in the letter dated 02.04.2005 requested the Board to inform the arrears position to settle all the dues. Accordingly, the Board intimated them, but the consumer failed to pay the arrears.
10.0. At this juncture, it is relevant to extract the impugned orders and also Clause 6.10 of the Terms and Conditions, that was framed under Section 49 of the Indian Electricity Act, 1948, which is statutory in nature. 10.1. The first impugned order of the third respondent in Lr.No.SE/PEDC/PDKT/DFC/AO/R/RCS-2C/D.No.207/2009, dated 02.04.2009 reads as follows :
"With reference to the letter cited, it is informed that effecting new power supply at the campus of disconnected HT Service No.48, M/s.Balaji Steels, not feasible for compliance since the above consumer not yet settled the outstanding amount of Rs.41,59,619/- to TNEB (Dues upto 4/09)."
10.2. The order of the third respondent dated 27.07.2009 in Lr.No.SE/PEDC/PDKT/AO/REV/RCS-1/D.No.405/2009, which is also impugned in this writ petition, reads as hereunder:
"With reference to the above, it is informed that the premises/campus which you have purchased are connected with the disconnected HT SC.No.48 and 52 having the arrears up to 31.07.2009 of Rs.82.19 Lakhs. It is also confirmed by the Executive Engineer/O&M/Keeranur.
Hence effecting of new supply in that area is not feasible of compliance until the arrears amounts are settled."
10.3. The impugned order of the third respondent dated 05.10.2009 in Lr.No.SE/PEDC/PDKT/AO/Rev./RCS-1/D.No.534/2009, reads as hereunder:
"With reference to the above, it is hereby informed that service connection to M/s.Omnifuesion Technologies can be effected only after clearing the CC Charges including the BPSC amount as on date of M/s.Balaji Steels HT SC No.48 and M/s.Subhadra Alloys HT.SC.No.52."
10.4. Clause 6.10 of the Terms and Conditions reads as follows :
"6.10. The Board will refuse to supply electricity to an intending consumer who has defaulted in payment of dues to the Board in respect of any other service connection held in his name.
In case of services which have been disconnected/dismantled for non- payment of arrears and if the services are to be availed by other parties in the same premises either by purchase or transfer or in auction or on lease basis then in such cases the services will be effected only on clearance of the dues outstanding against such disconnected/dismantled service by the intending consumers."
11. It is also relevant to extract hereunder Section 185 (1) and (2)(a) of the Act :
"Section 185. Repeal and saving.-
(1) Save as otherwise provided in this Act, the Indian Electricity Act, 1910 (9 of 1910), the Electricity (Supply) Act, 1948 (54 of 1948) and the Electricity Regulatory Commission Act, 1998 (14 of 1998) are hereby repealed. (2) Notwithstanding such repeal,-
(a) anything done or any action taken or purported to have been done or taken including any rule, notification, inspection, order or notice made or issued or any appointment, confirmation or declaration made or any licence, permission, authorisation or exemption granted or any document or instrument executed or any direction given under the repealed laws 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;"
12. Section 185(2)(a) makes it clear that notwithstanding the repeal of the Electricity Act, 1948, anything done or any action taken or purported to have been done or taken including any rule, notification, inspection, order or notice made under the Repealing law shall have effect insofar as it is not inconsistent with the provisions of the Act. Therefore, I am of the view that the submission made by the learned Standing Counsel for the Board that Clause 6.10 of the Terms and Conditions would continue to operate even after the repeal of 1948 Act, has strong force. Accordingly, I hold that the Board is entitled to sustain the impugned orders relying on Clause 6.10 of the Terms and Conditions.
13. After the Act came into force, the Supply Code was issued under Section 50 of the Act, which is akin to Terms and Conditions framed under the 1948 Act. Clause 17(3), (4) (8) and (9) of the Supply Code are relevant for the purpose of this case and the same are extracted hereunder:
"17. Agreement with respect to supply : Issues on recovery of charges.- ".........
(3) The licensee may require the consumer, who, at any time during the currency of the agreement, intends to sell or otherwise dispose of or lease out in whole or in part of the premises or business to which supply is given or has been contracted for, to give three months' notice of his intention to the designated authority of the distribution licensee and clear all dues upto the date of sale/disposal/lease. In the case of such notice, the agreement in so far as the consumer is concerned, will cease to operate with effect from the date of specified in such notice, but without prejudice to any claim or right which may have accrued to the parties thereunder.
(4) If the consumer fails to give advance intimation as aforementioned of his intention to sell or lease out or otherwise dispose of the properties or business to which supply is given or contracted for, the licensee shall have the right to recover the charges for consumption and other charges due to the licensee under the agreement even beyond the date of sale or lease out or otherwise disposal of the properties or business.
......
(8) Where any consumer has more than one service connection, if he defaults in the payment of dues relating to any one of the service connections, the licensee may cause other service connections in the name of the consumer to be disconnected on issuing proper notice till all the arrears due for all the service connections are paid, notwithstanding the fact that the service connections are covered under separate agreements.
"9 (a) In case of service connections in a premises, which have been disconnected/dismantled for defaults in payment of dues whatsoever and if such service connections are to be reconnected or new service connections are to be obtained by other persons in such premises either by purchase or transfer or lease basis, the Distribution Licensee shall reconnect such service connections or effect new service connections as the case may be, in such premises only after payment of dues attributed to such premises by the applicant. Provided that in case such premises have legally been sub-divided, the outstanding dues attributed to such premises shall be divided in proportion to the area covered by that sub-division. A new service connection to any of such sub-divided premises shall be given only after the share of outstanding dues attributed to such sub-divided premises, is duly paid by the applicant. The Distribution Licensee shall not refuse connection to an applicant of such sub- divided premises only on the ground that dues attributed to the other portion(s) of such sub-divided premises have not been paid, nor shall the licensee demand record of last paid bills of such other portion(s) from such applicants.
(b) The authorised officer of the licensee may permit such applicant to pay the outstanding dues in instalments and to avail the service on payment of 40% of the total arrears outstanding including BPSC in addition to the charges for reconnection of such service connections or effecting new service connections. The balance 60% of the outstanding dues shall be collected in 10 monthly instalments.
(c) In case an intending buyer of a premises requests for the details of electricity charges due from the owner /occupier of the premises to the distribution licensee, the distribution licensee shall provide such details on payment of the charges as stipulated in the order of the Commission on non-
tariff related miscellaneous charges for the time being in force."
14.(i). The learned counsel for the petitioner placed heavy reliance on Isha Marble's case.
14.(ii). Isha Marbles purchased the property in 1991. The electrical connection of the premises was disconnected due to the non-payment of arrears. The appellant was called upon to discharge the liability of the previous consumer in the premises of the property purchased by the Isha Marbles, when sought for electricity supply. This was challenged by them before the High Court of Patna by way of writ proceedings. Their writ petition was dismissed. They preferred appeal to the Apex Court. However, similar claims made by other purchasers for supply of electricity were allowed by different orders by the Patna High Court. The Bihar State Electricity Board preferred appeals against those orders. All these appeals were disposed in the judgment reported in (1995) 2 SCC 648. The appeals preferred by the Bihar State Electricity Board were dismissed and the appeals preferred by the Isha Marbles was allowed.
14.(iii). The Apex Court held in paragraph 56 of the judgment that based on the contract entered into by the erstwhile consumer with the Board, the Board cannot seek to enforce the contractual liability against the third party, the purchaser of the property.
14.(iv). The Apex Court also relied on the circular dated 19.01.1972 of the Board that in the case of a genuine purchase, if the old consumer had committed default, it would neither be legal nor proper to insist on the realisation of the arrears due for giving re-connection. Paragraphs 9 and 59 of the judgment could be usefully referred to in this regard.
14.(v). The Board did not produce any statutory Rule to deny reconnection or fresh supply to the premises, that was purchased by a purchaser, when the old consumer was in huge arrears towards payment of consumption charges.
14.(vi). The Apex Court held in paragraph 63 that the Electricity is public property and the law was inadequate to enforce the liability of the erstwhile consumer on the purchaser of the property in the following words:
"63. ..... Electricity is public property. Law, in its majesty, benignly protects public property and behoves everyone to respect public property. But, the law, as it stands, is inadequate to enforce the liability of the previous contracting party against the auction purchaser who is a third party and is in no way connected with the previous owner/occupier. It may not be correct to state, if we hold as we have done above, it would permit dishonest consumers transferring their units from one hand to another, from time to time, infinitum without the payment of the dues to the extent of lacs and lacs of rupees and each one of them can easily say that he is not liable for the liability of the predecessor in interest. No doubt, dishonest consumers cannot be allowed to play truant with the public property but inadequacy of the law can hardly be a substitute for overzealousness. ....."
14.(vii). In paragraph 6 of the judgment in Haryana State Electricity Board's case, the Apex Court stated in its own words about the decision of the Apex Court in Isha Marble's case. The relevant portion in paragraph 6 of Haryana State Electricity Board's case is extracted hereunder:
"6. ...... In Isha Marbles V. Bihar State Electricity Board (supra) this court held that in the absence of a charge over the property in respect of the previous electricity dues, and in the absence of any statutory rules authorizing a demand for the dues of the previous occupant, an auction purchaser seeking supply of electrical energy by way of a fresh connection, cannot be called upon to clear the pre-sale arrears, as a condition precedent for granting fresh connection. This court further held that an Electricity Board could not seek the enforcement of the contractual liability of the previous owner/occupier against a purchaser, who was a third party in so far as the contract between the Electricity Board and the previous occupant and that an auction purchaser who purchases the property after disconnection of the electricity supply, could not be considered as a `consumer' within the meaning of the Electricity Act, 1910 or Electricity (Supply) Act, 1948, even though he seeks reconnection in respect of the same premises......."
14.(viii). But in my view, in this case, there exists a statutory rule, namely, Clause 6.10 of the Terms and conditions authorizing the Board to refuse to supply electricity to an intending consumer in case of services which have been disconnected/dismantled for non-payment of arrears and if the services are to be availed by other parties in the same premises either by purchase or transfer or in auction or on lease basis, the services will be effected only on clearance of the dues outstanding against such disconnected/dismantled service by the intending consumer.
14.(ix). I have already come to the conclusion that Clause 6.10 is saved by Section 185(2)(a) of the Act and therefore, the condition precedent for granting fresh connection under Clause 6.10 could be valid and thus, the judgment in Isha Marble's case cannot be applied to this case.
15.(i). Further as rightly contended by the learned counsel for the Board, the judgment in Isha Marble's case was distinguished by the Apex Court in Dakshin Haryana Bijli Vitran Nigam Limited's case.
15.(ii). In that case, Dakshin Haryana Bijli Vitran Nigam Limited, a distributing company established in the place of the state Electricity Board, was the appellant. One M/s.L.L.C. Steels Private Limited fell into arrears to the tune of Rs.64,23,695/- towards electricity consumption charges. In those circumstances, the power supply to the said undertaking was disconnected on 06.04.1998. In 1998, the undertaking was purchased by the first respondent in that appeal before the Apex Court.
15.(iii). On 27.11.2001, the appellant company incorporated a term 21-A in the Terms and Conditions of Supply of electrical energy. The same was notified on 11.02.2002. The first respondent applied for electric connection on 01.01.2002. The said term, stipulates that in cases where a consumer had defaulted in paying electrical charges and there had been a consequent disconnection of supply, no fresh connection in respect of the premises would be given to a purchaser unless the purchaser cleared the amount that was left in arrears by the consumer whose undertaking had been purchased. Based on which, the service connection to the first respondent was declined. Hence, the first respondent filed W.P.No.5350 of 2002 in the High Court of Punjab and Haryana praying to quash the circular dated 27.11.2001 introducing the term in the Terms and Conditions of supply, as stated above.
15.(iv). A learned Judge of the High Court accepted the argument on behalf of the first respondent that the purchase by the first respondent was on 22.04.1999, but the new terms and conditions was issued on 27.11.2001 and the same could not be applied in the case of the first respondent and that the appellant company was bound to provide the electric connection to the first respondent without insisting on the Terms and Conditions of Supply introduced with effect from 27.11.2001.
15.(v). The Division Bench also confirmed the said order by dismissing the appeal at the admission stage itself by referring to the decision in Isha Marble's case.
15.(vi). The High Court did not go into validity or otherwise of Clause 21-A of the Terms and Conditions of Supply.
15.(vii). The Apex Court held in paragraph 15 of the judgment that the appellant had power to insert Clause 21-A in the Terms and Conditions of Supply of Electric Energy, in view of Sections 49 and 79(j) of the Electricity (Supply) Act, 1948. The relevant portion from the judgment of the Apex Court in the same paragraph, i.e., in paragraph 15 reads as follows :
"15. ..... Under Section 49 of the Supply Act, the licensee or rather, the Electricity Board, is entitled to set down the Terms and Conditions of Supply of electrical energy. In the light of the power available to it, also in the context of Section 79(j) of the Supply Act, it could not be said that the insertion of clause 21-A in the Terms and Conditions of Supply of electrical energy is beyond the power of the appellant. It is also not merely contractual. ................ This Court has also held that though the Electricity Board is not a commercial entity, it is entitled to regulate its tariff in such a way that a reasonable profit is left with it so as to enable it to undertake the activities necessary. If in that process in respect of recovery of dues in respect of a premises to which supply had been made, a condition is inserted for its recovery from a transferee of the undertaking, it cannot ex facie be said to be unauthorized or unreasonable. ...."
15.(viii). The Apex Court held in paragraph 16 that the Apex Court in Isha Marble's case had no occasion to consider the effect of clauses like Clause 21-A in the Terms and Conditions of Supply and distinguished the Isha Marble's case. The relevant portion of paragraph 16 is extracted hereunder in this regard:
"16. ..... There was no insertion of a clause like clause 21A as in the present case in the Terms and Conditions of Supply involved in that case. The decision proceeded on the basis that the contract for supply was only with the previous consumer and the obligation or liability was enforceable only against that consumer and since there was no contractual relationship with the subsequent purchaser and he was not a consumer within the meaning of the Electricity Act, the dues of the previous consumer could not be recovered from the purchaser. This Court had no occasion to consider the effect of clause like clause 21A in the Terms and Conditions of Supply. We are therefore of the view that the decision in Isha Marbles cannot be applied to strike down the condition imposed. ....."
15.(ix). Since the validity of the Clause 21-A of the Terms and Conditions of Supply was not decided by the High Court, the orders of the High Court were set aside and the matter was remitted back to decide the validity of the Clause. However, in the meantime, the first respondent was directed to deposit Rs.25,00,000/- within a period of six weeks to continue the electricity power supply since the first respondent succeeded in the High Court and enjoyed the electric supply.
15.(x). At this juncture, it is relevant to extract Clause 21-A of the Terms and Conditions of Supply that was considered by the Apex Court in paragraph 9 as hereunder :
"9. .....
21-A (a) When there is transfer of ownership or right of occupancy of a premises, the registered consumer shall intimate the transfer of right of occupancy of the premises within 15 days to the Assistant Engineer/Assistant Executive Engineer concerned. Intimation having been received, the service shall be disconnected unless application for transfer is allowed. If the transferee desires to enjoy the service connection, he shall pay the outstanding dues, if any, to the Nigam and apply for transfer of the service connection within 30 days and execute fresh agreement and furnish fresh security. New Consumer number shall be allotted in such cases canceling the previous number.
(b) Reconnection or new connection shall not be given to any premises where there are arrears on any account due to the Nigam unless these are cleared in advance. If the new owner/occupier/allottee remits the amount due from the previous consumer, the Nigam shall provide reconnection or new connection depending upon 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 Nigam get the full or partial dues from the previous consumer through legal proceedings or otherwise, the amount remitted by the new owner/occupier to whom the connection has been effected shall be refunded to that extent. But the amount already remitted by him/her shall not bear any interest.
(c) The above proposed provisions of clause 21-A(a) & (b) shall be applicable to existing consumers also where defaulting amount exists against premises occupied by such consumer."
15.(xi). The Apex Court held in paragraph 11 of the judgment that though the sale of undertaking took place prior to the insertion of Clause 21-A, in view of Clause 21-A(b) and (c), the existing customers could be directed to pay the arrears of the erstwhile consumer to continue the supply. The relevant portion in paragraph 11 of the said judgment is extracted hereunder:
"11. According to us, the High Court has gone wrong in holding that this newly inserted clause 21A of the terms and conditions was not applicable to the first respondent. It is true that the sale of the undertaking at the instance of the Financial Corporation to the first respondent was prior to 27.11.2001 and possession was also given to the first respondent on 22.4.1999, prior to the insertion of clause 21A. But going by clause 21A(c) it is clear that even if the view taken by the High Court that the relevant date is the date of sale in favour of the first respondent is accepted, even then, the appellant would be entitled to apply sub-clause (b) of clause 21A to the first respondent as an existing consumer, since defaulting amount existed against the premises occupied by the first respondent. ............"
15.(xii). Furthermore, the Apex Court held in paragraphs 12 to 14 that in view of the Haryana Government Electrical Undertakings (Dues Recovery) Act, 1970 and the Punjab Land Revenue Act, 1997, the dues payable by the erstwhile consumer could be recovered by proceeding against the undertaking even in the hands of Transferee. Paragraphs 12 to 14 of the judgment of the Apex Court are extracted hereunder:
"12. We find that the High Court has also not referred to the Haryana Government Electrical Undertakings (Dues Recovery) Act, 1970 which came into effect on 27.10.1970. The said Act enabled the Electricity Board, of which the appellant is the successor, to recover the dues to the Board on account of consumption of electrical energy and other charges as defined in that Act to be recovered as an arrear of land revenue notwithstanding anything contained in any other law or instrument or agreement to the contrary. We may set down Section 6 of that Act herein:
"6. Recovery of dues, etc., if not paid - If the aggregate amount of the various dues, penalty and costs mentioned in the notice of demand served under Section 4 is not deposited with the prescribed authority within sixty days of the date of such service or such extended period as the prescribed authority may from time to time allow, the debtor shall be deemed to be in default in respect of such amount and the same shall be recoverable as an arrear of land revenue, notwithstanding anything contained in any other law or instrument or agreement to the contrary.
(2) For the purpose of such recovery, the prescribed authority may forward to the Collector a certificate under his signature in the prescribed form stating the amount and details of the demand and the name and description of the debtor in default and the Collector shall on receipt of such certificate, proceed to recover from the debtor the amount of the demand as if it were an arrear of land revenue."
13. The recovery of arrears of land revenue is provided for in the Punjab Land Revenue Act, 1887. Chapter 6 thereof deals with recovery. Section 61 provides that the entire estate and the land owner shall be liable for the land revenue for the time being assessed on the estate. Section 62 provides as further security that the land revenue payable in respect of a holding shall be the first charge upon rents, profits and produce thereof. Section 67 deals with the modes of recovery of arrears of land revenue. That section contemplates recovery, inter alia, by way of arrest and detention of the person who is liable to pay the land revenue; by distress and sale of his movable property and uncut or ungathered crops; by transfer of the holding in respect of which the arrears is due; by attachment of the estate or holding in respect of which the arrears is due; by sale of that estate or holding or by proceeding against other immovable property of the defaulter. Under Section 72 of the Act, the Collector can takeover the management of the estate or effect attachment thereof and under Section 75 he can sell the estate itself for recovery with the previous sanction of the Commissioner. Thus, the amount due from the prior owner of the undertaking or consumer could be recovered by proceeding against the undertaking even in the hands of the transferee if we go by the relevant provisions of the above two enactments applicable to recovery of dues by the appellant or its predecessor, the Electricity Board. If in the context of such provisions, the appellant introduced a term in the Terms and Conditions of Supply in the case of a transfer that the transferee has to discharge the prior amounts due in respect of that undertaking by the prior consumer, could it be said that it had no authority to do so or that the provision is not a reasonable one in the interests of safeguarding the rights of the appellant?
14. We must notice that the High Court did not consider the effect of the above enactments relating to recovery of dues. Counsel for the first respondent submitted that no such contention was raised in the High Court and even in this petition for special leave to appeal such a contention is not raised. But considering that the contention is based on statutes enacted by the State Legislature and are in force, the arguments cannot be ignored by merely stating that they were not put forward before the High Court, since they have been put forward before us at the time of arguments. At best, the first respondent could plead that it did not get a proper opportunity to meet this contention in the circumstances of this case."
15.(xiii). By applying the law laid down by the Apex Court in paragraphs 12 to 14, I am of the view that in view of Section 6 of the Recovery of Dues Act read with the Tamil Nadu Revenue Recovery Act, 1864, the dues payable by M/s.Balaji Steels and M/s.Subhadra Alloys could be recovered by proceeding against the property even in the hands of the writ petitioner. It is relevant to note that already distraint orders are pending and in my view, there is no bar for the Board to proceed to recover the same, while insisting the clearance of dues based on Clause 6.10 of the Terms and Conditions and 17.9 of the Supply Code that new electricity service connection could not be given unless the arrears are settled.
15.(xiv). Further in paragraph 11, the Apex Court held that any reasonable enquiry by the first respondent as a prudent buyer would have put it on notice of the subsistence of a liability by the erstwhile consumer. The relevant portion of paragraph 11 is also extracted hereunder:
"11. ..... It is not as if the first respondent was an ignorant party. 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. ...."
15.(xiv). Therefore, as rightly contended by the learned counsel for the Board, the petitioner, an entrepreneur, is not an ignorant party and the writ petitioner should have been prudent by enquiring about the dues payable to the Board towards the consumption charges by the erstwhile consumer.
15.(xv). In my view, for the aforesaid reasons, the judgment inDakshin Haryana Bijli Vitran Nigam Limited's case squarely covers this case.
16.(i) The next judgment relied on by the learned counsel for the petitioner is the judgment of the Apex Court in Haryana State Electricity Board V. Hanuman Rice Mills, Dhanauri and Others, (2010) 9 SCC 145.
16.(ii) In Haryana State Electricity Board's case, the judgments of Isha Marbles's case and Dakshin Haryana Bijli Vitran Nigam Limited's case were considered.
16.(iii). In that case, the first respondent therein, namely, Hanuman Rice Mills, purchased in auction the premises of M/s.Durga Rice Mills, on 14.12.1990. When the first respondent purchased the premises, the electricity supply to the premises had been disconnected. After purchasing the premises, the first respondent applied for and obtained electricity service connection in its name in 1991. Four years later, the appellant, namely, Haryana State Electricity Board, served upon the first respondent a notice dated 16.01.1995 demanding payment of Rs.2,39,251/- towards arrears of electricity charges payable by Durga Rice Mills.
16.(iv) Initially, the first respondent filed a civil suit for permanent injunction. The said suit was dismissed on 05.12.1996 and the same was confirmed by the appellate court on 27.02.1998.
16.(v). Thereafter, the appellant Board served a notice dated 02.03.1998 informing the first respondent that the electricity supply would be disconnected if the said arrears due by Durga Rice Mills were not paid. This was followed by disconnection of electricity supply on 09.03.1998.
16.(vi). The first respondent therein filed a suit challenging the said demand and disconnection of electricity supply. The suit was dismissed by the trial court. However, while dismissing the suit, the trial court held that the claim of the appellant Board was barred by limitation.
16.(vii). In those circumstances, feeling aggrieved by the dismissal of the suit, the first respondent filed an appeal. The appellant also filed an appeal, in view of the finding of the trial court that the claim was barred by limitation.
16.(viii). The first appellate court, by a common judgment dated 30.10.2003, allowed the appeal of the first respondent, while dismissing the appeal of the appellant.
16.(ix). The matter was taken by way of second appeal to the Punjab and Haryana High Court. The High Court dismissed the second appeal on 08.08.2005 relying upon the judgment in Isha Marbles's case and held that the liability of a consumer to pay charges for consumption of electricity cannot be fastened on a subsequent auction purchaser of the property, in view of the decision in Isha Marbles's case.
16.(x). Aggrieved against the judgment in the second appeal, the Electricity Board filed appeal before the Apex Court. On facts of the case, the Apex Court held that the decision of the High Court does not call for interference. It is relevant to extract paragraph 11 of the judgment in (2010) 9 SCC 145 as hereunder:
"11. On facts, it has to be held that the decision of the High Court does not call for interference. The appeal is therefore dismissed. ...."
16.(xi). Further, the Apex Court held that the appellant never pleaded its defence that there existed any statutory rule or terms and conditions of supply authorizing the electricity board to demand the dues of previous owner from the first respondent. The Apex Court also held that the appellant did not demand the alleged arrears, when the first respondent approached the appellant for electricity connection in its own name for the same premises and obtained it in 1991 itself. The Apex Court noted that more than three years thereafter, a demand was made by the appellant on 16.01.1995 only. In these circumstances, the Apex Court held that the claim could not be enforced against the first respondent.
16.(xii). At this juncture, it is relevant to extract paragraph 10 of the judgment in Haryana State Electricity Board's case, under the caption "Position in this case" and the same is extracted hereunder:
"10. The appellant did not plead in its defence that any statutory rule or terms and conditions of supply, authorized it to demand the dues of previous owner, from the first respondent. Though the appellant contended in the written statement that the dues of Durga Rice Mills were transferred to the account of the first respondent, the appellant did not specify the statutory provision which enabled it to make such a claim. The decision in Paramount Polymers shows that such an enabling term was introduced in the terms and conditions of electricity supply in Haryana, only in the year 2001. The appellant did not demand the alleged arrears, when first respondent approached the appellant for electricity connection in its own name for the same premises and obtained it in the year 1991. More than three years thereafter, a demand was made by the appellant for the first time on 16.1.1995 alleging that there were electricity dues by the previous owner. In these circumstances the claim relating to the previous owner could not be enforced against the first respondent."
16.(xiii). But the decision in the case on hand under consideration is different. The statutory terms, namely, 6.10 of the Terms and Conditions and Clause 17(9) of the Supply Code, vest power on the respondent Board to deny electricity supply connection to the purchaser of a property, if the erstwhile consumer was to pay arrears towards consumption charges for the electricity connection in the premises that was purchased by the purchaser.
16.(xiv). Secondly, in this case, when the writ petitioner approached the respondent Board for electricity connection in its own name for the same premises, the Board correctly passed the impugned orders thrice reiterating its stand. Therefore, I am of the view that the judgment of the Apex Court in Harayana State Electricity Board's case could not render any assistance to the writ petitioner.
17.(i). The next judgment relied on by the learned counsel for the petitioner is the judgment of a learned Single Judge of this Court in Shahjahan V. Superintending Engineer, TNEB, (2012) 4 MLJ 763.
17.(ii). Before considering the same, I would like to consider the judgment of the Apex Court in Paschimanchal Vidyut Vitran Nigam Limited V. DVS Steels and Alloys Private Limited, (2009) 1 SCC 210, since the same was considered by the learned Single Judge in Shahjahan's case.
17.(iii). The appellant in Paschimanchal's case, namely, Paschimanchal Vidyut Vitran Nigam Limited was holding electricity distribution licence, being one of the successors-in-interest of the Uttar Pradesh State Electricity Board (for short "UPSEB"). The third respondent therein was a consumer receiving electricity supply from the UPSEB to its industrial unit at Ghaziabad. In April 1994, the UPSEB raised supplementary bills for Rs.105.78 lakhs against the third respondent towards difference in tariff.
17.(iv). The third respondent therein filed a civil suit disputing the claim made by UPSEB and obtained an order of injunction restraining the UPSEB from recovering the amount mentioned in the supplementary bill.
17.(v). The UPSEB filed an appeal before the Allahabad High Court challenging the order of the civil court and the High Court granted stay of operation of the injunction order and thereby permitted recovery of the outstanding dues from the third respondent.
17.(vi). While so, the third respondent closed its unit in 1998. In 2001-2002, it sub-divided its industrial plot into 129 smaller plots of different sizes. One of those plots was sold by the third respondent to the first respondent.
17.(vii). The first respondent applied to the appellant, who had succeeded UPSEB, for supply of electricity for running an induction furnace in the plot purchased by it. The appellant sanctioned the request for supply of electricity on 04.09.2004, subject to the condition that the first respondent should pay the arrears due by the third respondent, in proportion to the area purchased by it as a condition precedent for supply of electricity.
17.(viii). Accordingly, on 18.09.2004, the first respondent deposited a sum of Rs.8,63,451/-, being the pro rata dues by the third respondent, subject to the condition that in the event of the pending challenge to the demand being decided in favour of the third respondent, the appellant shall refund the amount deposited by the first respondent.
17.(ix). But other plot purchasers from the third respondent did not pay the pro rata dues by the third respondent for supply of electricity, like the petitioner. The appellant did not give them electricity supply.
17.(x). In these circumstances, in November 2005, the third respondent moved an application before the Uttar Pradesh Electricity Regulatory Commission (for short "the Commission") complaining that the appellant was arbitrarily refusing power connection to the purchasers of the sub-divided plots on the ground that Rs.105.78 lakhs was due by the third respondent, though the said liability was disputed and the dispute was pending adjudication in the Court.
17.(xi). The Commission passed an order dated 25.11.2005 directing the appellant to accept a bank guarantee from the third respondent in regard to the disputed claim of Rs.105.78 lakhs and on such bank guarantee is frunished, the third respondent shall give new power connections to the purchasers of the sub-divided plots from the third respondent, without insisting upon payment of any amount towards the alleged dues of the third respondent.
17.(xii). Pursuant to the aforesaid order of the Commission, the third respondent furnished a bank guarantee on 05.12.2005 for Rs.105.78 lakhs to the appellant. Thereafter, the appellant granted electricity supply to the other purchasers without demanding pro rata amount of arrears of the third respondent, as directed by the Commission.
17.(xiii). While so, the first respondent sent a letter dated 15.09.2006 to the appellant demanding to refund the sum of Rs.8,63,541/-, that was deposited with the appellant, with interest, in view of the bank guarantee furnished by the third respondent, as stated above.
17.(xiv). The appellant refused the request of the first respondent. According to the appellant, it was entitled to recover the dues of the previous occupier of a premises, from any subsequent occupier thereof who seeks electricity supply. The appellant also pointed out that the order of the Commission would operate prospectively and the same could not apply to payments received by the appellant, prior to the order and there was no direction to refund the pro-rata payments already received.
17.(xv). Feeling aggrieved against the said order of the appellant refusing to refund the amount, the first respondent filed W.P. No.59163 of 2006. The High Court allowed the writ petition on 14.05.2007 and directed the appellant to refund the sum of Rs.8,63,451/- with interest at the rate of 6% per annum. The order of the High Court was based on the reason that the amounts said to be due by third respondent were secured by a bank guarantee furnished by the third respondent, and therefore, there was no need to retain any amount from the purchasers of the sub-divided plots. The said order of the High Court was challenged before the Apex Court.
17.(xvi). The appellant relied on Clause 4.3 (g) and (h) of the Electricity Supply code, which provides that if a consumer disposed of its premises, or any portion thereof, without clearing the dues in regard to the electricity supplied to its premises, any transferee seeking fresh electricity connection or supply of electricity to the premises, will have to clear the electricity dues of the previous occupant. The appellant also submitted before the Apex Court that similar provisions, as that of Clause 4.3 (g) and (h) of the Electricity Supply Code, existed in the relevant regulations of the UPSEB before the Electricity Supply Code came into force.
17.(xvii). In the said circumstances, the Court declared the law in unequivocal terms in the following words in paragraph 12 of the judgment. Paragraph 12 of the judgment in (2009) 1 SCC 210 is extracted hereunder:
"12. ..... 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."
17.(xviii). In this case also, which is under consideration, the Clause 6.10 of the Terms and Conditions was in existence before Clause 17(9) was introduced in the Supply Code. Furthermore, the Apex Court made it clear that even if the rules are silent, the Board can stipulate the terms and conditions to regulate its transactions and dealings. Therefore, the impugned orders in this writ petition are, firstly, based on Clause 6.10 of the Terms and Conditions and in any event, even if the Terms and Conditions are silent, the impugned orders prescribing such a condition is not unreasonable, in view of the aforesaid categorical finding of the Apex Court. Further, the impugned orders are valid due to the saving made by Section 185(2)(a) of the Act.
17.(xix). In fact, the Apex Court held in paragraph 13 that if the distributor stipulates such a condition, the same is not unreasonable. Paragraph 13 is extracted hereunder:
"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 clause 4.3(g) and (h) of Electricity Supply Code are necessary to safeguard the interests of the distributor."
17.(xx). Furthermore, the Apex Court held in categorical terms in paragraph 14 that it is the duty of the purchasers of premises to satisfy themselves that there are no electricity dues before purchasing the premises. Paragraph 14 is extracted hereunder:
"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 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."
17.(xxi). After holding so in paragraphs 12 to 14, as stated above, the Apex Court held in paragraph 15 that action of the appellant in refusing to refund the amount is not illegal or unauthorized. The relevant portion in paragraph 15 is extracted hereunder:
"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 first respondent was illegal or unauthorized. ....."
17.(xxii). Ultimately, the Apex Court held that the appellant is not liable to refund the deposit made by the first respondent, since the Commission did not direct in its order dated 25.11.2005 to refund the amount, while directing the third respondent to furnish a bank guarantee. Accordingly, the appeal of the appellant was allowed by the Apex Court.
18(i). Now let me consider the judgment of the learned Single Judge in Shahjahan's case:
18.(ii). In Shahjahan's case, the petitioner therein was the owner of a Shed No.17/F5 at SIDCO Industrial Estate, Krishnagiri Taluk. The building was originally owned by one Manivel, the proprietor of a firm by name "Indian Wire Products". He had electricity connection for the said building. He did not pay the consumption charges to the tune of Rs.89,890/-. Hence, electricity was disconnected and electrical installation was dismantled in 1993 itself.
18.(iii). Mr.Manivel also obtained loan from Tamil Nadu Industrial Investment Corporation by hypothecating the said property. The said corporation put the property for public auction as the loan was not repaid by him. One Malathi purchased the property in the public auction on 17.09.1998. Thereafter, the petitioner therein purchased the property from the said Malathi by way of sale deed executed on 24.11.1999.
18.(iv). Thereafter, the petitioner therein made an application to the TNEB for electricity service connection. But the TNEB declined to give electricity service connection on the ground that unless the petitioner therein clears the dues of Rs.89,890/- payable by Mr.Manivel to them, fresh electricity service connection could not be granted to the said building. An order dated 10.01.2001 was passed to that effect. The same was challenged in that writ petition.
18.(v). The writ petition was allowed based on the judgment of the Apex Court in Isha Marbles's case. When the learned counsel for the Board pointed out the judgment of the Apex Court in Paschimanchal's case, the learned Single Judge held that the Supreme Court in Paschimanchal's case applied the doctrine of Estoppel and held that the refund cannot be ordered. It is also held by the learned Single Judge that the Apex Court did not lay down the law that the subsequent purchaser is liable to pay the dues. On the other hand, the learned Single Judge held that the Apex Court in Isha Marbles's case held that there is no charge created over the property in respect of the dues to the Board from the erstwhile owner of the property. The following passage from paragraph 15 of the judgment of the learned Single Judge in Shahjahan's case is extracted hereunder:
"15. ..... Two things are understandable from the above judgment. First of all, the amount was paid voluntarily and having paid the same so voluntarily, according to the Electricity Board, he was estopped from demanding refund. Thus applying the doctrine of estoppel, the Honourable Supreme Court held that refund cannot be ordered. Incidentally, the Honourable Supreme Court took note of the proceedings pending before the Electricity Regulatory Commission. That is the reason why in the rider clause, the Honourable Supreme Court held that in the event, if it is found that the respondent therein was found to be not liable then the amount will be refundable. Thus, the Honourable Supreme Court has not at all laid down that there was charge created in respect of the dues from the erstwhile owner and therefore, the subsequent purchaser is liable to pay the dues. As I have already narrated in Isha's case, the Honourable Supreme Court has laid down the law thereby declaring that there is no charge created over the property in respect of the dues to the Board from the erstwhile owner of the property and therefore, the subsequent purchaser who has purchased the property free from encumbrance is not a debtor and he is not liable to pay the amount."
18.(vi). In my view, the judgments of the Apex Court in Dakshin Haryana Bijli Vitran Nigam Ltd.'s case [(2006) 13 SCC 101] and in Haryana State Electricity Board's case [(2010) 9 SCC 145] were not brought to the notice of the learned Singe Judge, wherein, the judgment in Isha Marbles's case was clearly distinguished. Furthermore, the judgment of the Apex Court in Paschimanchal's case is not based on doctrine of Estoppel. The relevant paragraphs, namely, paragraphs 12 to 15, from Paschimanchal's case, that were extracted above, make it clear that the Apex Court declared the law in categorical terms that the distributor of electricity can stipulate a condition that the arrears in regard to the electricity supplied to the premises of erstwhile consumer should be cleared by the purchaser before electricity supply is restored or a new connection is given to the same premises.
18.(vii). Therefore, I am not inclined to follow the judgment of the learned Single Judge as the same is opposed to the law laid down by the Apex Court in Dakshin's case and Paschimanchal's case and also the judgment of the Division Bench of this Court dated 17.08.2011 in W.A.Nos.1898 of 2001 etc. batch (M.Rukmani V. The Tamil Nadu Electricity Board, rep. by its Chairman, Chennai and others), which is discussed hereunder.
19.(i). The Division Bench judgment in Rukmani's case is based on Clause 6.10 of the Terms and Conditions. The facts of that case are identical to the facts of the Paschimanchal's case.
19.(ii). In Rukmini's case, the appellants therein purchased various plots by way of different sale deeds. The properties were owned by M/s.Angappa Spinning Mills Private Limited. The said company was in arrears to the tune of Rs.90,51,768/- to the Board towards electricity consumption charges. The property was plotted out and those plots were sold to various persons. The purchasers sought for electricity service connection. The same was declined by the Board, relying on Clause 6.10 of the Terms and Conditions. The same was the subject matter in the writ appeal. The erstwhile partners of M/s.Angappa Spinning Mills Private Limited were also impleaded in the writ appeal proceedings. In those circumstances, the Division Bench has categorically laid down the law in paragraphs 31 and 32 as follows:
"31. After execution of the sale deed by the vendor to the purchaser, whatever the liability to be paid by the vendor has to be cleared by the purchaser, viz., when the purchaser steps into the shoes of the vendor, the liability passes on from the vendor to the purchaser. The purchaser who purchases the land should be aware and should take all steps to show that he is a bona fide purchaser. In the present case, purchasers have not taken any steps to know whether there has been any due on the part of the vendor before entering into the sale deed. It is normally expected from a purchaser that before entering into a sale deed he should see whether the dues to the Government as well as other agencies are cleared by the vendor or not. The appellants though said to have acted in bona fide they were not cautious while entering into the sale deed. Whatever the liability towards the electricity dues by the owner of the land had passed on to the subsequent purchasers, namely, the appellants and the appellants have every right to proceed against the previous owner for recovery of the dues paid by them.
32. In the preceding paragraphs of the present decision, we have already held that the impleaded respondents, namely, the previous owners are liable to clear the electricity dues. However, the apprehension expressed by the Board that, if the Board could not realise the amount, it would be put to irreparable loss, cannot be said to be irrelevant. In the peculiar facts and circumstances of the case, we fell that interest of justice would be served by directing the Board to initially realise the amount from the subsequent purchasers taking into consideration the extent of land they had purchased from the previous owners and, after recovering the amount due from the previous owners, subsequently such realised amount may be refunded to the individual subsequent purchasers. In other words, taking into account the extent of land purchased by the appellants and similarly placed persons, the Board can collect the amount as deposit and, after recovering the old dues, the amount collected as deposit shall be refunded to the appellants. It is made clear that the Board shall effect service only on clearance of the dues outstanding against such disconnected services by the subsequent purchasers and the subsequent purchasers are at liberty to proceed against the previous owners, namely, the impleading respondents, by initiating appropriate proceedings before the Civil Court for recovery of the sum to be paid by them to the Board. We feel that the aforesaid directions/agreement would protect the interest of the Board as well as the subsequent purchasers. It is further made clear that this order would abide not only the appellants who have come to court for service connection, but also the others who have subsequently purchased and not come to the Court. This direction given in the present case is based on the peculiar facts and it should not be taken as a precedent in any other case either by the Board or by the subsequent purchaser. The subsequent purchasers are expected to co-operate with the Board in giving the details of the land purchased by them and in making deposit within the time to be fixed by the Board."
19.(iii). The said judgment of the Division Bench is in fact in terms of the judgments of the Apex Court in Dakshin's case, Paschimanchal's case and Haryana State Electricity Board's case.
19.(iv). The Special Leave Petition preferred against the judgment of the Division Bench was also dismissed by the Apex Court by the order dated 19.03.2012.
19.(v). Hence, I am in agreement with the submission made by the learned counsel for the Board that in view of the aforesaid decisions, the writ petition deserves to be dismissed.
20.(i). The learned counsel for the Board also relied on the judgment of a learned Single Judge dated 27.04.2005 in M.Sheik Dawood, represented by his power of attorney Dr.A.Mustafa, V. Executive Engineer, TNEB, Madurai Division, Madurai and another, (W.P.No.2992/2004).
20.(ii). The learned Single Judge in that case considered Clause 6.10 of the Terms and Conditions and held that even after the Act came into force by repealing the Electricity Supply Act, 1948, the action of the Board under Clause 6.10 of the Terms and Conditions is saved by Section 185(2)(a) of the Act.
20.(iii). I have also come to the same conclusion in paragraph 12 of this judgment.
21. In view of the aforesaid discussions, the writ petition fails and the same is dismissed. However, there will be no order as to costs. Consequently, connected miscellaneous petitions are closed.
22. Considering the importance of the issue, the first respondent/the Chairman, TNEB, is directed to circulate this judgment to all the concerned Superintending Engineers of the Board to insist upon payment of dues of erstwhile consumers in the premises, for which electricity supply has been disconnected/dismantled for default in payment of dues, by the subsequent purchasers for effecting re-connection / fresh connection to the same premises, besides taking recovery proceedings.
gg To
1. The Chairman, Tamil Nadu Electricity Board, Anna Salai, Chennai.
2. The Chief Engineer (Commercial), Tamil Nadu Electricity Board, No.144, Anna Salai, Chennai.
3. The Superintending Engineer, Pudukottai Electricity Distribution Circle, Pudukottai.