Calcutta High Court
Ganesh Wire Industries vs C.E.S.C. Limited And Ors. on 25 April, 2002
Equivalent citations: (2002)3CALLT16(HC), 2002(2)CHN649, AIR 2003 CALCUTTA 138, (2002) 2 CAL HN 649, (2002) 3 CALLT 16, (2002) CAL WN 1071
Author: Kalyan Jyoti Sengupta
Bench: Kalyan Jyoti Sengupta
JUDGMENT Kalyan Jyoti Sengupta, J.
1. Originally the writ petition was filed alleging inaction of CESC in not granting separate new electric supply line to the writ petitioner. The short case made out in the writ petition as follows :
One M/s. Champa wire Industries being the pro forma respondent No. 5 obtained financial accommodation from the West Bengal Financial Corporation for setting up its small-scale industries for manufacturing wire at premises No. 435 Jessore Road Calcutta. The pro forma respondent indeed set up industrial unit and obtained electric connection from the respondent No. 1. Thus there was contractual relationship between the respondent No. 5 and the respondent No. 1 as license and consumer.
2. The respondent No. 5 thereafter committed default in paying off the loan granted by the respondent No. 6 and in terms of the agreement the plant and machinery and other assets being possessed by the respondent No. 5 were taken over by the respondent No. 6 and the same was ultimately sold by an agreement in writing to the writ petitioner.
3. In terms of the agreement it appears that the writ petitioner has not become the absolute owner and/or transferee of the above industrial unit. It is pertinent to mention the writ petitioner No. 1 purchased the industrial unit as a going concern on the terms and conditions mentioned in the Agreement for Sale. After purchase the writ petitioner decided to run the factory, so it approached the respondent No. 1 with application for new electric supply connection to the same industrial unit wherefrom the old supply line given to the respondent No. 5 was not then withdrawn.
4. It appears from the writ petition that though petitioner had applied for new connection, but, in substance, it wanted resumption and/or restoration of the supply line either by way of new connection or reenergizing old and existing line. So, the writ petitioner in fact wanted to settle and negotiate with the respondent No. 1. However, respondent No. 1 was not agreeable to supply electric energy either by way of new supply line or reenergizing the load and existing line, unless a sum of Rs. 19,42,149.31 is liquidated by the petitioner. According to CESC the aforesaid amount fell due and outstanding in relation to consumption of electric energy by the respondent No. 6.
5. At the interim stage it appears that Justice Kalyanmoy Ganguly (as His Lordship then was) was pleased to pass an order directing the respondent No. 1 to restore the electric supply through the old and existing line upon payment of a sum of Rs. 65,000/- and shall continue to supply, provided the petitioner pays a sum of Rs. 15,000/- per month for the first six months and thereafter at the rate of 20,000/- per month till a sum of Rs. 2,45,00,4.19p. is repaid. Thus, writ petitioner got electric connection through the old line and consumed the same without any disturbance, whatsoever, until the time a further disconnection was effected on 22 December, 2000. Both the writ petitioner as well as the respondent No. 1 have accepted the interim order passed by Justice Ganguly and no appeal was preferred therefrom.
6. In the affidavit-in-opposition respondent No. 1 has taken the point unless a sum of Rs. 19,42,149.31 being the outstanding dues is liquidated by the writ petitioner, separate supply line or for that matter resumption of old electric connection, is not possible.
7. During pendency of the writ petition there is an amendment of the law relating to electric supply by the West Bengal State Legislative Assembly by and under the Electricity (Supply) West Bengal Amendment Act, 1994. The said Amendment has taken effect on and from 20th April, 1995, by the said Amendment a new Section 49B has been incorporated. By this amended provision it has been made clear amongst other that:
"The sum due to the Board or Licensee shall stand recoverable and shall be recovered from the sale proceeds or from the former owner or Manager or new owner or the Manager, as the case may be, as being a charge recoverable as a public demand under the Public Demands Recovery Act, 1913, and the authority under whose order such industrial or commercial concern or establishment is wound up, closed or put to sale, or the ownership or management is transferred, or is amalgamated, or any scheme is drawn up for its reopening or revitalization or restructuring, as the case may be, shall take such steps as may be necessary for expeditious recovery and payment of the dues of the Board of the licensee, as the case may be, from such sale proceeds or from the owner or manager together with interest at the rate of current bank rate on the outstanding sum as aforesaid for the period commencing from the date on which such sum became due till the date of payment."
8. Now the point has cropped up whether in view of the aforesaid amendment the respondent No. 1 can demand for payment by virtue of Section 49B from the writ petitioner being the new owner or manager by making retrospective application of the said section or not.
9. Mr. Sumit Panja learned counsel appearing for the writ petitioner contends that the aforesaid provision of the law has no retrospective operation. At the time of filing of the writ petition the aforesaid provision of law was not there. He contends that the relationship between licensee and consumer is absolutely personal in nature so corresponding rights and obligation cannot be transferred nor can they devolve upon the succession-in-interest of the property where the electric supply was given. In view of the aforesaid section now outstanding dues are sought to be recovered from the successor-in-interest of industrial concern. In support of his submission he has relied on a number of decisions of the Supreme Court (Isha Marbles case) , and a decision of the learned single Judge of this Court reported in (200l)3 CAL LT 292.
10. Mr. Maharaja Sinha (now Justice Sinha) contends that in view of the insertion of Section 49B in the Electric (Supply) West Bengal Amendment Act, 1994, during pendency of the writ petition, the writ petitioner is obliged to pay the outstanding dues of the respondent No. 6. He contends that Court should take judicial notice of the change of law takes place during pendency of lis and further the law prevailing on the date of order or judgment, while doing so it should mould the relief, accordingly. In support of his contention he relied on the decision of the Supreme Court .
11. Having heard respective contentions of the learned counsels, the issue involved in the writ petition rested on two points, namely, whether Section 49B as inserted in the Act of 1948, by amendment, can have any retrospective application, meaning thereby whether the writ petitioner pursuant thereto, can be made liable to make payment of the outstanding electricity dues of the respondent No. 6 or not. If so. whether the respondent No. 1 can insist as a condition precedent on clearing outstanding dues of the respondent No. 6 for effecting new connection in the name of the writ petitioner.
12. I will deal with first the question of retrospective application of the above section as this question has tremendous impact on the entire, issues involved in the writ petition. The instant writ petition was filed, admittedly, sometimes in the year 1992, whereas the said Amendment Act, incorporating Section 49B came into force on 20th April, 1995. Before the said amendment the present issue more or less was really settled by Supreme Court in Isha Marbles case. In that case Justice speaking for the Bench after considering the previous judgment of the Supreme Court on this subject was pleased to hold that the auction purchaser who wanted reconnection in its name, cannot be made liable in relation to the alleged outstanding dues of the erstwhile owner of the unit. It was observed in paragraph 63 of the said judgment amongst other that:
"Electricity is public property. Law, in its majesty, benignly protects public property and behoves everyone to respect public property. Hence, the Courts must be zealous in this regard. But, the law, as it stands, is inadequate to enforce the liability to the previous contracting party against the auction-purchaser who is 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, for time to time, infinitum without the payment of the dues to the extent of lakhs and lakhs 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 substitute for over zealousness."
13. Perhaps, in order to cover up the aforesaid legal difficulty the aforesaid amendment is sought to be made and this has been observed by me in my judgment rendered in another case (Arun Shaw and Anr. v. CESC Ltd. and Ors.) reported in (2001)3 CAL LT 292. In that case I held that the petitioners being tenants therein were not liable to make payment of the outstanding electricity dues payable by the previous tenant. Having taken note of the aforesaid amendment and examined the question of applicability of the same in case of third party tenant.
14. The judgment of the Supreme Court cited by Mr. Maharaj Sinha (as His Lordship then was) in Koran Singh's case though has observed that the Court should take judicial notice of the law prevailing as on the date of order or judgment and applying the relevant provisions of the law prevailing on that date and mould the relief on the basis of that law. This case was subsequently approved by a Bench consisting of three Judges. These two decisions, however, have been held by a larger Bench of five Judges, to be no longer good law [see ].
15. In the decision of the Supreme Court rendered on a case of Benami Transaction (Prohibition) Act, 1945 of 1998 it has been held amongst other that "in paragraph 1 it is obvious that when a statutory provision creates new liability and new offence it would naturally have prospective operation and would cover only those offences which take place after Section 3(1) comes into operation".
16. The aforesaid judgment had taken note of an old decision of the Supreme Court rendered in case of Garikapati v. N. Subbia Chowdhury . In this decision the then Chief Justice S.R. Das speaking for the Court was pleased to observe that golden rule of construction is that in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be so construed as to have the effect altering the law applicable to a case in return at the time when the Act was passed.
17. In another decision of a larger Bench of the Supreme Court it has been observed by necessary implication that unless expressedly or impliedly there is a mention of retrospective operation the law cannot be made operative retrospectively rather it is always prospective operation. While observing this the learned Judge took note of the text authored by Francis Bennion's Statutory interpretation, 2nd edition at page 214. The author commented on this aspect as under.
'The essential idea of a legal system is that current law should govern current activities. Elsewhere in this work a particular Act is likened to a floodlight switched on or off, and the general body of law to the circumambient air. Clumsy though these images are, they show the inappropriateness of retrospective laws. If we do something today, we feel that the law applying to it should be the law in force today, not tomorrow's backward adjustment of it. Such, we believe, is the nature of law. Dislike of ex post facto law is enshrined in the United States Constitution and in the Constitutions of many American States, which forbid it. The true principle is that ex prospicit non respicit (law looks forward not back) retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated ought when introduced for the first time, to deal with future acts, and ought not to change the character of past transactions carried on upon the faith of the then existing law."
18. Retrospectivity is artificial, deeming a thing to be what it was not. Artificiality and make-believe are generally repugnant to law as the servant of human welfare. So it follows that the Courts apply the general presumption that an enactment is not in power of Parliament to produce such an effect where general presumption, which therefore applies only unless the contrary intention appears, is stated in Maxwell on the Interpretation of Statutes in the following emphatic terms : "It is a fundamental rule of English law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication."
19. Now it is to be examined as to whether the aforesaid principle is applicable in this case. By the aforesaid amendment the State Legislature indeed intends to create a liability, amongst other, to the third party who has purchased and/or has been managing the industrial unit on 20th April, 1995. In this case on the date of making application for new connection the aforesaid statutory provision was not there. Therefore applying the principle laid down in the aforesaid Supreme Court's decisions a piece of legislation having effect of creation of liability cannot be made retrospective operation. The writ petitioner cannot be compelled to accept a liability which was not existing on the date of making application. An owner always purchases a property after having made searches enquiries amongst other as to liability attached to the property and then decides to pay price for it which may include the liability existing at the time of transaction. Therefore, the present liability created by the aforesaid section after completion of transaction cannot be made applicable against the petitioner. I, therefore, hold that the aforesaid section cannot have any retrospective operation in this case. Had the application of the petitioner for obtaining new connection been decided within the time stipulated in clause (VI) of the Schedule to the Electricity Act, 1910 namely, within one month, then the writ petitioner would not have to think about this liability.
20. So, I hold that the writ petitioner has no obligation to pay the above alleged outstanding dues of the respondent No. 6.
21. In any event the aforesaid amendment and/or change has given a right to the respondent No. 1 to recover the alleged dues amongst others from the new owner and/or Manager of the sold industrial unit. But, this right of recovery cannot be a plea and/or justification to refuse new electric connection, as under Section 22 of the said Act in order to give new connection, the licensee can realize the sum which will ensure minimum annual amount as will give the licensee reasonable return on the capital expenditure incurred to meet possible maximum demand for the premises. I accordingly direct the line which has already been given to the petitioner, pursuant to the interim order shall be regularized as being a new connection and shall stand in the name of the writ petitioner.
22. The amount which has already been paid in terms of the interim order shall be adjusted accordingly. The amount of any surplus will however adjusted in the manner as follows :
23. It appears during pendency of the writ petition there arose several disputes for which the petitioner's line was disconnected and subsequently restored in terms of the Court's order. It appears Justice Barin Ghosh was pleased to pass an order directing the petitioner to deposit a certain amount as a condition precedent for restoration of the supply line which was disconnected on the allegation of pilferage of electric energy. But this interim order the petitioner deposited a sum of rupees two lakhs and odd and the rest of the claim in relation to the pilferage deposit has yet to be adjudicated by the adjudicator. Therefore, all these amounts which have already been paid in terms of the interim order after giving adjustment of costs and expenses and securities, shall abide by the decision of the adjudicator in terms of the order of Justice Barin Ghosh.
Thus the writ petition as well as the other connected applications are disposed of.
There will be no order as to costs.