Gujarat High Court
Govindbhai vs Uttar on 19 December, 2011
Author: Bhaskar Bhattacharya
Bench: Bhaskar Bhattacharya
Gujarat High Court Case Information System
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LPA/2762/2010 28/ 28 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
LETTERS
PATENT APPEAL No. 2762 of 2010
In
SPECIAL
CIVIL APPLICATION No. 4449 of 2010
For
Approval and Signature:
HONOURABLE
THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA
HONOURABLE
MR.JUSTICE J.B.PARDIWALA
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1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
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GOVINDBHAI
SOMNATHBHAI SUTHAR PROPRIETOR OF GSP INDUSTRIAL - Appellant(s)
Versus
UTTAR
GUJARAT VIJ CO LTD - Respondent(s)
=========================================================
Appearance
:
MR
RD DAVE for
Appellant(s) : 1,
NOTICE SERVED BY DS for Respondent(s) : 1,
MS
LILU K BHAYA for Respondent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA
and
HONOURABLE
MR.JUSTICE J.B.PARDIWALA
Date
: 19/12/2011
CAV
JUDGMENT
(Per : HONOURABLE MR.JUSTICE J.B. PARDIWALA) This appeal is at the instance of original writ-petitioner seeking to challenge the legality, validity and propriety of the judgment and order dated September 28, 2010 passed by the learned Single Judge in Special Civil Application No.4449 of 2010, thereby the learned Single Judge refused to grant any relief to the original writ- petitioner and rejected the petition.
The facts relevant for the purpose of deciding this appeal can be summarized as under :
2.1 The Company named M/s.Deep Wires Private Ltd. availed of loan facility from the Gujarat State Financial Corporation (hereinafter referred to as 'the Corporation') . The factory premises of the Company was offered as a security to the Corporation by creating charge over the same situated at C-1-65, GIDC Industrial Estate, Phase-II, Dediyasan, Mehsana. Record reveals that M/s.Deep Wires Pvt. Ltd. defaulted repayment of loan to the Corporation and, therefore, the Corporation initiated action against the Company under Section 29 of the Gujarat State Financial Corporations Act (hereinafter referred to as 'the Act'). In exercise of powers under Section 29 of the Act, the factory premises of the Company was put to auction by inviting tenders. The appellant herein participated in the auction proceedings and offered a price of Rs.3,11,111/-. The appellant's tender being the highest, the Corporation accepted the same and issued a sale letter dated July 4, 1994 in favour of the appellant. Record also reveals that the entire payment was made good to the Corporation by the appellant. It appears that the appellant herein requested the Corporation vide letter dated August 2, 1994 to accept the amount in the name of M/s.GSP Industrial Product, which is a proprietary concern of the appellant, of which the appellant is the sole proprietor. This request was also accepted by the Corporation. The appellant thereafter approached the respondent-Company for electric connection by preferring appropriate application in a requisite form together with details. It was brought to the notice of the respondent-Company that the appellant has purchased the factory premises of M/s.Deep Wires Private Ltd. in the auction proceedings conducted by the Corporation and the sale in favour of the appellant has been made final.
2.2 Record reveals that the respondent-Company refused to accede to the request of the appellant for electric connection on the ground that there are dues of the erstwhile owner M/s.Deep Wires Private Ltd. and unless and until such dues of the erstwhile owner are not paid to the respondent-Company, the appellant is not entitled to electric connection. Record reveals that as there was urgency on the part of the appellant to start the factory, the appellant deposited a sum of Rs.1,43,286-32 ps. with the respondent-Company. This is evident by letter of the appellant dated January 2, 1995 addressed to the Deputy Executive Engineer, Rural Sub Division, Gujarat Electricity Board, Mehsana. The entire contents of the letter have been reproduced by the learned Single Judge in paragraph 6 of the judgment.
2.3 Record reveals that on payment of dues of the erstwhile owner, No Due Certificate was issued by the respondent-Company dated January 9, 1995.
2.4 In the meantime, the appellant learnt that the respondent-Company could not have recovered dues of the erstwhile owner from the auction-purchaser of the property in question in light of the pronouncement of the Supreme Court in the case of Isha Marbles v. Bihar State Electricity Board and others, reported in (1995) 2 SCC
648. Taking recourse of the pronouncement of the Supreme Court on the subject, the appellant preferred Special Civil Application No.4698 of 1996 and prayed for an appropriate writ, order and direction upon the respondent-Company to refund the amount of Rs.1,43,286-32 ps. recovered from the appellant towards the dues of the erstwhile owner.
2.5 The aforesaid petition preferred by the appellant came to be disposed of by the learned Single Judge vide order dated October 28, 2009. The order passed by the learned Single Judge dated October 28, 2009 is reproduced herein for the sake of convenience:
"1. The petitioner, by way of this petition, has prayed for an appropriate writ, direction and order directing the respondents-Gujarat Electricity Board (at the relevant time) to refund the amount of Rs.1,43,286-32 ps. to the petitioner which the petitioner deposited for the purpose of getting new connection and/or reconnection.
2. It is the contention of the petitioner that the petitioner purchased the property in question in an auction held by the respondent No.2 and that the petitioner was not liable to bear the burden of its liability of erstwhile owner in respect of the arrears to be paid to the respondent No.1 - GEB. It is also the contention on behalf of the petitioner that the petitioner was constrained to deposit the said amount as the petitioner was not granted reconnection and / or electricity supply. Mr. Sandeep Bhatt, learned advocate appearing on behalf of the petitioner has submitted that the controversy in question is covered by the judgment of the Hon'ble Supreme Court in case of M/S ISHA MARBLES V. BIHAR STATE ELECTRCITY BOARD AND OTHERS reported in JT 1995 (2) SC 626 as well as decision of this Court in case of M/S SARVODAYA CORRPORATION V. GUJARAT ELECTRCITY BOARD AND OTHERS reported in 1995 (1) GLR 196. It is also the case on behalf of the petitioner that it is the case prior to introduction of Condition-2(j) and therefore, the petitioner is entitled to refund.
3. Mr. R.C. Jani, learned advocate appearing on behalf of the respondent No.1 - GEB has submitted that in case where the dispute and / or controversy is prior to introduction of Condition-2(j), normally being reconsidered by the G.E.B.
4. At this stage, Mr. Sandeep Bhatt, learned advocate appearing on behalf of the petitioner has submitted that the petitioner has already submitted an application for refund. In view of the aforesaid facts and circumstances of the case and more particularly, the controversy is for the period prior to Condition No.2(j) and in view of the above submission made by Mr. Jani, the respondent No.1 is directed to reconsider its decision in light of the judgment of the Hon'ble Supreme Court of India in case of M/S ISHA MARBLES V. BIHAR STATE ELECTRCITY BOARD AND OTHERS reported in JT 1995 (2) SC 626 as well as decision of this Court in case of M/S SARVODAYA CORRPORATION V. GUJARAT ELECTRCITY BOARD AND OTHERS reported in 1995 (1) GLR 196 and to take an appropriate decision within four weeks from today. In case after their decision, an any amount is to be determined to be refunded to the petitioner, the same be adjusted in the subsequent bills.
5. With aforesaid observations and direction, the petition stands disposed of accordingly. It is clarified that the amount which is already paid or recovered will adjusted against the future dues. However, it will be open for the petitioner to challenge the decision that may be taken if the same is adverse to the petitioner."
2.6 Record reveals that the request of the appellant for refund was turned down by the respondent-Company on the premise that the dues which were paid by the appellant were paid in the name of the erstwhile owner i.e. M/s.Deep Wires Private Ltd. and, therefore, the proprietary concern of the appellant cannot request for refund of the said amount. The respondent-Company appears to have taken a very unusual and unreasonable stand that the dues can be said to have been paid by the erstwhile owner and not by the appellant. The stand of the respondent-Company before the learned Single Judge by way of affidavit-in-reply was as under :
"6. I say that the petition is not maintainable before this Hon'ble Court looking to the prayer made by the petitioner in para 9(B) of the petition for refund of Rs.1,43,286/- along with interest @ 18% p.a. It is submitted that for such prayer petition under Art. 226 of the Constitution is not maintainable. Therefore, on this ground only, the petition is required to be dismissed.
7. I further say that even otherwise as per he petitioner, cause of action is alleged to have arisen when he has paid the amount in the year 1995. Merely because the petitioner has approached this Hon'ble Court and the Hon'ble Court has permitted to make representation, the petition cannot be said be within limitation. Therefore, on this ground also, the petition is required to be dismissed.
8. Respondent submits that admittedly the petitioner has purchased the aforesaid property in auction from GSFC Admittedly there were dues in the name of old consumer M/s. Deep Wires Pvt. Ltd. And the receipt has also been issued in the name of M/s. Deep Wires Pvt. Ltd. It is not correct to say that the respondent has refused to release the connection. I say that the record shows that the amount of Rs.1,43,286.32 ps. Was paid in the account of old consumer M/s. Deep Wires Pvt. Ltd. And and receipt is also issued in the name of M/s. Deep Wires Pvt. Ltd.
9. Respondent submits that the respondent has rightly refused to entertain the representation of the petitioner and rejected the claim of the petitioner vide letter dated 19.1.2010. It is clear that as per the record, old consumer has cleared the dues. The respondent herein (erstwhile Gujarat Electricity Board) has not insisted for payment of dues of old consumer M/. Deep Wires Pvt. Ltd. from the petitioner. Therefore, petitioner has no locus standi to ask for the refund of the said amount. Therefore, the petition deserves to be dismissed on this ground also.
10. Respondent further submits that before the decision of the Hon'ble Supreme Court in the case of Isha Marbles, the erstwhile Gujarat Electricity Board was entitled to recover the dues of the earlier consumer. I say that as on today also, petitioner's demand for refund is untenable in view of the legal position as on today. Respondent submits that assuming without admitting that as alleged by petitioner, petitioner has paid the amount of the dues of the earlier consumer, the petitioned is not entitled to refund of the same in view of the decision of the Hon'ble Supreme Court reported in (2009) 1 SCC 210 in the case of DVS Steels.
11. Petitioner is not entitled to any prayers made in para 9(A) to (D).
12. In view of what is submitted hereinabove and what may be submitted at the time of hearing, it is most respectfully prayed that Your Honour be pleased to vacate the ad interim relief granted earlier and dismiss the petition with costs."
2.7 The learned Single Judge after taking into consideration the stand taken by the respondent-Company came to the conclusion that there are disputed questions of facts and, therefore, refused to grant any relief and rejected the petition. The substance of the entire judgment of the learned Single Judge is in paragraphs 20 and 21. They are reproduced hereinbelow :
"20.
In view of facts which are found from record, there is no demand made by respondent from petitioner that first petitioner should make payment of due amount of erstwhile consumer and thereafter only, electric connection will be given and there is also no insistence made by respondent to petitioner to make payment of dues of erstwhile owner for getting electric connection, as per reply filed by respondent which is not controverted by petitioner by filing any rejoinder. Further, learned advocate Mr. Dave for petitioner is also not able to point out on the basis of any document received by petitioner from respondent in writing to show that respondent insisted for such payment of dues of erstwhile consumer first for getting electric connection and there is no any document produced by petitioner which would substantiate say of petitioner that respondent has demanded due amount of old consumer from petitioner and due to that only, amount is paid by petitioner, for which, petitioner is legally not liable to pay such amount of old consumer. According to my opinion, decision relied upon by learned advocate Mr. Dave for claiming refund of amount is not applicable to facts of present case because there is no demand or insistence made by respondent to petitioner in respect of due amount of old consumer and, therefore, decisions referred to and relied upon by learned advocate Mr. Dave are not applicable to facts of present case.
21. I have considered in detail submissions made by both learned advocates. I have also considered the law which has been relied upon by both parties. I have also considered pleadings of both parties. According to my opinion, in light of these disputed question of facts and also in absence of any insistence or demand from respondent for payment of dues of erstwhile consumer for getting electric connection, law which has been relied upon by learned advocate Mr. RD Dave is not applicable as such disputed questions of fact cannot be effectively decided in a writ petition and, therefore, this court cannot entertain such writ petition exercising powers under Article 226 of Constitution of India. Therefore, according to my opinion, contentions raised by learned advocate Mr. Dave for petitioner cannot be accepted. Same are, therefore, rejected. Hence there is no substance in this petition and, therefore, this petition is dismissed. Notice is discharged. No order as to costs."
We have heard the learned counsel for the respective parties and we have also gone through the materials on record. The learned counsel for the appellant vehemently contended that the impugned judgment passed by the learned Single Judge is erroneous and contrary to the settled position of law. The learned counsel submitted that the learned Single Judge erred in not following the ratio of recent judgment of the Supreme Court in the case of Haryana State Electricity Board v. M/s. Hanuman Rice Mills and others, reported in JT 2010 (8) SC 619, wherein earlier judgment of the Apex Court in the case of Isha Marbles (supra), has been followed.
3.1 He further submitted that in the first round of litigation i.e. while deciding Special Civil Application No.4669 of 2007, the learned Single Judge relied upon the decision of the Supreme Court in the case of Isha Marbles (supra) and on the basis of the same directed the respondent-Company to consider the prayer of the appellant for refund of the dues of the erstwhile owner which were paid by the appellant for getting electric connection.
3.2 The learned counsel for the appellant further submitted that the position of law at the relevant point of time was very much clear. The respondent-Company had no jurisdiction or powers to demand the outstanding dues of the previous owner from the purchaser of the Unit in auction held by financial institution/ Bank. He further submitted that the learned Single Judge erred in not appreciating that in the judgment dated September 28, 2009 passed in Special Civil Application No.4669 of 2007, the respondent-Company was specifically directed to consider the judgment of the Apex Court in the case of Isha Marbles (supra) and to take decision since controversy was prior to introduction of Condition 2(j) of the Regulations as relied upon by the respondent-Company. He submitted that it is in this background that the learned Single Judge at the relevant point of time directed the respondent-Company to take decision in four weeks and adjust the amount in subsequent bills.
3.3 He further submitted that the learned Single Judge ought to have appreciated that the appellant has purchased industrial unit in public auction held by the Corporation on July 4, 1994 and under coercion the appellant had to pay a sum of Rs.1,43,286-32 ps. to the respondent-Company to get electric connection since the respondent-Company refused to give connection unless and until dues of previous owner M/s.Deep Wires Private Ltd. are paid.
3.4 He further submitted that the entire unit was purchased by the appellant from the Corporation for Rs.3,11,111/- whereas the demand of the respondent-Company towards the dues of the erstwhile owner was to the tune of Rs.1,43,286-32 ps. which is almost 50% of the total costs of the Unit. He, therefore, submitted that the demand was altogether illegal and unreasonable. It is in this background that the appellant refused to pay the dues of the erstwhile owner, but ultimately was left with no other option by the respondent-Company but to deposit the amount towards arrears of the erstwhile owner for the purpose of getting electric connection.
3.5 He further submitted that the stand of the respondent-Company is not only unreasonable but it does not befit an instrumentality of a State to say that amount cannot be refunded because the dues were deposited by the appellant in the name of the erstwhile owner i.e. M/s.Deep Wires Private Ltd. and not in the name of M/s.GSP Industrial Product i.e. proprietary concern of the appellant. He contended that unless and until a person is compelled to pay such a huge amount towards the dues of the previous owner for getting electric supply, no prudent person would pay on his own free will and volition. He submitted that the cheques which were drawn by the appellant were from his own bank account and solely on this ground, the learned Single Judge ought to have rejected the contention of the respondent-Company that the amount towards arrears was paid by the previous owner M/s.Deep Wires Private Ltd. Lastly, he submitted that the letter of the appellant dated January 2, 1995 addressed to the respondent-Company bears eloquent testimony to the fact that the cheques for the requisite amount totalling to Rs.1,43,286/- were drawn by the appellant and were paid towards the arrears of dues of M/s.Deep Wires Private Ltd.
Per contra, the learned counsel for the respondent-Company vehemently submitted that the learned Single Judge has rightly rejected the petition and no error much less an error of law can be said to have been committed by the learned Single Judge that warrants any interference at our hands in this appeal. The learned counsel for the respondent-Company submitted that assuming for a moment that the amount towards the arrears of dues of the erstwhile owner was paid by the appellant, in the year 1994 the position of law was made clear by the Supreme Court in the case of Isha Marbles (supra), only on February 3, 1995. The learned Single Judge led emphasis on the fact that the demand towards the dues of the erstwhile owner were much before the judgment of Isha Marbles (supra) and the payment was also made by the appellant much before the judgment in the case of Isha Marbles and, therefore, on the strength of a subsequent judgment of the Supreme Court, the appellant cannot pray for refund of requisite amount. The learned counsel for the respondent-Company vehemently submitted that the judgment of the Apex Court in the case of Isha Marbles (supra) would apply prospectively and not retrospectively. The learned counsel for the respondent-Company submitted that if the decision in the case of Isha Marbles (supra) is to be applied prospectively, then any payment made prior in point of time cannot be refunded. The learned counsel for the respondent-Company lastly submitted that appeal deserves to be dismissed.
We shall now undertake the analysis of the contentions as raised by the learned counsel for the respective parties. However, before appreciating the rival contentions, we would like to look into the position of law prevailing at the time when the appellant purchased the factory Unit in the auction proceedings conducted by the Corporation and also at the time when the appellant requested the respondent-Company to refund the amount paid by him towards the dues of the erstwhile owner.
For the first time in the case of Isha Marbles (supra), the Supreme Court considered the issue as to whether the auction-purchaser is liable to meet the liability of the old consumer of electricity to the premises which is purchased by him in the auction sale. The Supreme Court answered this issue in favour of the auction-purchaser holding as under :
"56. From the above it is clear that the High Court has chosen to construe Section 24 of the Electricity Act correctly. There is no charge over the property. Where that premises comes to be owned or occupied by the auction-purchaser, when such purchaser seeks supply of electric energy he cannot be called upon to clear the past arrears as a condition precedent to supply. What matters is the contract entered into by the erstwhile consumer with the Board. The Board cannot seek the enforcement of contractual liability against the third party. Of course, the bona fides of the sale may not be relevant.
57. The form of requisition relating to the contract is in Annexure VIII prescribed under Clause VI of the Schedule to the Electricity Act. They cannot make the auction purchaser liable. In the case of Isha Marbles we have already extracted the relevant clause wherein the consumer was asked to state his willingness to clear off the arrears to which the answer was in the negative. Therefore, the High Court has rightly held that the auction purchaser, namely, "the writ petitioner before us is ready and willing to enter into a now contract that the auction purchaser does not intend to obtain the continuance of supply of electrical energy on the basis of the old agreement". It Is true that it was the same premises to which reconnection is to be given. Otherwise, with the change of every ownership new connections have to be issued does not appear to be the correct line of approach as such a situation is brought about by the inaction of the Electricity Board in not recovering the arrears as and when they fall due or not providing itself by adequate deposits.
58. This is a case of sale under Section 29 of the Corporation Act. Of course, what the Corporation seeks to recover are the loans advanced by enforcement of a mortgage. Such sale cannot affect the right of the Board to recover the dues as and when such dues arose, is a point to be put against it.
59. Turning to the instruction issued by the Chairman of the Board and a Circular dated 19.1.72 on which the High Court had relied, in our considered view, is again to be weighed against the Electricity Board.
60. In view of the above, we hold that the decision in the Souriyar Luka (supra) on which reliance is placed by Mr.Gopal Subramaniam is correct. The ruling of National Textile Corporation (M.P.) Ltd., Bhopal (supra) rested on the interpretation. of the provisions of Sick Textile Under-takings (Nationalisation) Act (57 of 1974). That is not relevant, the question with which we are concerned did not directly arise in Bihar State Electricity Board, Patna and others v. M/s. Green Rubber Industries and others 1990 (1) SCC 731. We do not think it is necessary for us to refer to Rant Chandra Prasad Sharma and others v. State of Vihar and another AIR 1967 SC 349 since that case related to co-owner.
61. What we have discussed above pears to be the law gatherable from the various provisions which we have detailed out above. It is impossible to impose on the purchasers a liability which was not incurred by them.
62. No doubt, from the tabulated statement above set out, the auction purchasers came to purchase the property after disconnection but they cannot be 'consumer or occupier' within the meaning of the above provisions till a contract is entered into.
63. We are clearly of the opinion that there is great reason and justice in holding as above. 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. .. .. .."
Later on the Supreme Court had an occasion to consider the law as laid down in the case of Isha Marbles (supra) in Dakshin Haryana Bijli Vitran Nigam Ltd. v. Paramount Polymers (P) Ltd., reported in (2006) 13 SCC 101. In the case of Paramount Polymers Pvt. Ltd.
(supra), the Terms and Conditions of Supply contained a provision (Clause 21-A) providing that re-connection or new connection shall not be given to any premises where there are arrears of any amount, unless the arrears are cleared. In light of this provision (Clause 21-A), the Supreme Court distinguished from Isha Marbles (supra) on the following reasons :
"7. ..
.. ..
"This Court in Hyderabad Vanaspati Ltd. v. A.P. SEB [1998] 2 SCR 620 has held that the Terms and Conditions for Supply of Electricity notified by the Electricity Board under Section 49 of the Electricity (Supply) Act are statutory and the fact that an individual agreement is entered into by the Board with each consumer does not make the terms and conditions for supply 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. Of course, still a court may be able to strike it down as being violative of the fundamental rights enshrined in the Constitution of India. But that is a different matter. In this case, the High Court has not undertaken that exercise. The position obtaining in Isha Marbles (supra) was akin to the position that was available in the case on hand in view of the Haryana Government Electrical Undertakings (Dues Recovery) Act, 1970. 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 (supra) cannot be applied to strike down the condition imposed and the first respondent has to make out a case independent on the ratio of Isha Marbles (supra), though it can rely on its ratio if it is helpful, for attacking the insertion of such a condition for supply of electrical energy. This Court was essentially dealing with the construction of Section 24 of the Electricity Act in arriving at its conclusion. The question of correctness or otherwise of the decision in Isha Marbles (supra) therefore does not arise in this case especially in view of the fact that the High Court has not considered the question whether Clause 21A of the terms and conditions incorporated is invalid for any reason.""
The decision in the case of Paramount Polymers (P) Ltd. (supra) was followed subsequently by the Supreme Court in Paschimanchal Vidyut Vitran Nigam Ltd. v. Excell Buildcon Pvt. Ltd., reported in (2008) 10 SCC 720. Later on once again the Supreme Court in Paschimanchal Vidyut Vitran Nigam Ltd. v. DVS Steel and Alloys Pvt. Ltd., reported in (2009) 1 SCC 210, reiterated the principle that the electricity dues do not constitute a charge on the premises and where the Rules require such payment, the same will be binding on the purchaser. The Supreme Court held in Paschimanchal Vidyut Vitran Nigam Ltd. (supra) as under :
"8.
.. ....
"A transferee of the premises or a subsequent occupant of a premises with whom the supplier has no privity of contract cannot obviously be asked to pay the dues of his predecessor in title or possession, as the amount payable towards supply of electricity does not constitute a `charge' on the premises. A purchaser of a premises, cannot be foisted with the electricity dues of any previous occupant, merely because he happens to be the current owner of the premises.
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. 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. Provisions similar to Clause 4.3(g) and (h) of Electricity Supply Code are necessary to safeguard the interests of the distributor.""
In a very recent pronouncement of the Apex Court in the case of Haryana State Electricity Board v. M/s.Hanuman Rice Mills and others, reported in JT 2010 (8) SC 619, the Supreme Court once again considered the issue in question by considering all the previous judgments and held that in general law a transferee of a premises cannot be made liable for the dues of the previous owner/occupier, but if statutory rules or terms and conditions of supply authorises the supplier of electricity to demand from the purchaser of a property claiming re-connection or fresh connection of electricity, then the arrears of dues by the previous owner can be recovered from the purchaser. Final conclusion of the Supreme Court as held in paragraph 9 is as under :
"9. The position therefore can may be summarized thus :
(i) Electricity arrears do not constitute a charge over the property.
Therefore in general law, a transferee of a premises cannot be made liable for the dues of the previous owner/occupier.
(ii) Where the statutory rules or terms and conditions of supply which are statutory in character, authorize the supplier of electricity, to demand from the purchaser of a property claiming re-connection or fresh connection of electricity, the arrears due by the previous owner/ occupier in regard to supply of electricity to such premises, the supplier can recover the arrears from a purchaser."
Thus, the review of the case law as discussed above makes the position very clear. If there are statutory rules or terms and conditions of supply authorising the supplier of electricity to demand from the purchaser of a property claiming reconnection or fresh connection of electricity, then the purchaser is obliged to make good the arrears due by the previous owner and the respondent-Company can claim and recover arrears from a purchaser.
POSITION IN THIS CASE :
In the year 1994 when the present issue cropped up, the Electricity Act, 2003 was not in force. It is an admitted position that Condition 2(j) of the Regulations as relied upon by the respondent-Company was also not in force. In short, there were no statutory rules or terms and conditions of supply statutory in character in the year 1994 authorizing the respondent-Company to demand from the purchaser of a property claiming for fresh connection of electricity, the arrears of dues by the previous owner/occupier in regard to supply of electricity to such premises. It is, therefore, clear that in the year 1994, the demand of the respondent-Company for the arrears of dues of the previous owner M/s.Deep Wires Private Ltd. from the appellant was without any basis and statutory rules. It deserves to be noted that the payments were made by the appellant in October, 1994 by cheques which were realized on January 2, 1995. The appellant informed the respondent-Company that he has already made the payment of Rs.1,43,286/- as demanded by the respondent-Company towards the dues of M/s.Deep Wires Private Ltd. and requested the respondent-Company to provide with a new connection on February 3, 1995. Exactly after one month, the Supreme Court in Isha Marbles (supra) made the position of law very clear. The question which we need to address is as to whether the appellant could have relied upon the decision of the Apex Court in the case of Isha Marbles (supra) for the purpose of claiming refund of the amount. It is true that Isha Marbles (supra) is subsequent in point of time i.e. after the payment was made to the respondent-Company. The contention of the learned counsel for the respondent-Company is that the judgment of the Supreme Court in the case of Isha Marbles (supra) cannot be followed retrospectively as the same is prospective in nature. In short, the substance of the contention is that where a party has already made payment, such party cannot claim refund relying upon the decision in the case of Isha Marbles (supra).
We are of the view that the law declared by the Supreme Court is presumed to be the law at all times. We do not find on plain reading of the entire judgment of the Supreme Court in the case of Isha Marbles (supra) that the same would be applicable prospectively and not retrospectively. Firstly, there is no such clarification in the judgment itself and in absence of such clarification from the Supreme Court, the law has to be applied retrospectively.
The Supreme Court in the case of M.A. Murthy v. State of Karnataka and others, reported in (2003) 7 SCC 517, while explaining the doctrine of prospective overruling held as under :
"8.
.. .. .. Normally, the decision of this Court enunciating a principle of law is applicable to all cases irrespective its stage of pendency because it is assumed that what is enunciated by the Supreme Court is, in fact, the law from inception. The doctrine of prospective over-ruling which is a feature of American jurisprudence is an exception to the normal principle of law, was imported and applied for the first time in L.C. Golak Nath and Ors. v. State of Punjab and Anr. (AIR 1967 SC 1643). In Managing Director, ECIL, Hyderabad and Ors. v. B. Karunakar and Ors. (1993 (4) SCC 727) the view was adopted. Prospective over-ruling is a part of the principles of constitutional canon of interpretation and can be resorted to by this Court while superseding law declared by it earlier. It is a device innovated to avoid reopening of settled issues, to prevent multiplicity of proceedings, and to avoid uncertainty and avoidable litigation. In other words, actions taken contrary to the law declared prior to the date of declaration are validated in larger public interest. The law as declared applies to future cases. (See Ashok Kumar Gupta v. State of U.P. (1997) 5 SCC 201, Baburam v. C.C. Jacob (1999) 3 SCC 362). It is for this Court to indicate as to whether the decision in question will operate prospectively. In other words, there shall be no prospective over-ruling, unless it is so indicated in the particular decision. It is not open to be held that the decision in a particular case will be prospective in its application by application of the doctrine of prospective over-ruling. The doctrine of binding precedent helps in promoting certainty and consistency in judicial decisions and enables an organic development of the law besides providing assurance to the individual as to the consequences of transactions forming part of the daily affairs. .. .. .."
Two principles can be culled out from the aforesaid decision of the Supreme Court in the case of M.A. Murthy (supra) :
Law declared by the Supreme Court is presumed to be the law at all times i.e. the law from inception.
It is for the Court to indicate as to whether the decision in question will operate prospectively or retrospectively. In short, there shall be no prospective overruling unless it is so indicated in a particular decision.
By reason of a judgment, as is well-known, a law is declared. Declaration of a law may affect the rights of the parties retrospectively. Prospective application of a judgment by the Court must, therefore, be expressly stated. It would not be open for this Court now at this stage to say that though the Supreme Court in Isha Marbles (supra) has not clarified as to whether Isha Marbles (supra) would apply prospectively or retrospectively, but this Court can now say having regard to the nature of the issue that the same would apply prospectively. This is not permissible in light of ruling of the Supreme Court in the case of Sarwan Kumar and another v. Madan Lal Aggarwal, reported in AIR 2003 SC 1475.
In Sarwan Kumar's case (supra), the Supreme Court was dealing with an issue as to whether a decree for ejectment passed by a Civil Court qua a commercial tenancy in the State of Delhi before the declaration of law by the Supreme Court in Gian Devi Anand v. Jeevan Kumar, reported in AIR 1985 SC 796, that such a tenancy is heritable, is executable or the judgment-debtors can successfully object to the execution of the decree on the ground that the same was passed by a Court lacking inherent jurisdiction and, therefore, inexecutable. The Supreme Court while answering this question held in paragraph 13 as under :
"13.
For the first time this Court in Golak Nath Vs. State of Punjab, AIR 1967 SC 1643 accepted the doctrine of "prospective overruling". It was held:
"As this Court for the first time has been called upon to apply the doctrine evolved in a different country under different circumstances, we would like to move warily in the beginning. We would lay down the following propositions: (1) The doctrine of prospective overruling can be invoked only in matters arising under our Constitution; (2) it can be applied only by the highest court of the country, i.e., the Supreme Court as it has the constitutional jurisdiction to declare law binding on all the courts in India; (3) the scope of the retroactive operation of the law declared by the Supreme Court superseding its "earlier decisions" is left to its discretion to be moulded in accordance with the justice of the cause or matter before it."
The doctrine of "prospective overruling" was initially made applicable to the matters arising under the Constitution but we understand the same has since been made applicable to the matters arising under the statutes as well. Under the doctrine of "prospective overruling" the law declared by the Court applies to the cases arising in future only and its applicability to the cases which have attained finality is saved because the repeal would otherwise work hardship to those who had trusted to its existence. Invocation of doctrine of "prospective overruling"
is left to the discretion of the court to mould with the justice of the cause or the matter before the court. This Court while deciding the Gian Devi Anand's case ( supra ) did not hold that the law declared by it would be prospective in operation. It was not for the High Court to say that the law laid down by this Court in Gian Devi Anand's case ( supra ) would be prospective in operation. If this is to be accepted then conflicting rules can supposedly be laid down by different High Courts regarding the applicability of the law laid down by this Court in Gian Devi Anand's case (supra) or any other case. Such a situation cannot be permitted to arise. In the absence of any direction by this Court that the rule laid down by this Court would be prospective in operation the finding recorded by the High Court that the rule laid down in Gian Devi Anand's case (supra) by this Court would be applicable to the cases arising from the date of the judgment of this Court cannot be accepted being erroneous."
In Dr.Suresh Chandra Verma and others v. The Chancellor, Nagpur University and others, reported in 1990 (4) SCC 55, the Supreme Court held as under:
"..
.. .. It is unnecessary to point out that when the Court decides that the interpretation of a particular provision as given earlier was not legal, it in effect declares that the law as it stood from the beginning was as per its decision, and that it was never the law otherwise. .. .. .."
In Lily Thomas and others v. Union of India and others, reported in 2000 (6) SCC 224, the Supreme Court held as under :
"..
.. .. We are not impressed by the arguments to accept the contention that the law declared in Sarla Mudgal case cannot be applied to persons who have solemnised marriages in violation of the mandate of law prior to the date of judgment. This Court had not laid down any new law but only interpreted the existing law which was in force. It is a settled principle that the interpretation of a provision of law relates back to the date of the law itself and cannot be prospective from the date of the judgment because concededly the Court does not legislate but only gives an interpretation to an existing law. .. .. .."
Applying the principles of law as explained by the Supreme Court in the aforesaid decisions, we have no hesitation in coming to the conclusion that the respondent-Company could not have demanded the dues of the previous owner M/s.Deep Wires Private Ltd. from the appellant for the purpose of fresh electric connection. We are convinced from the materials on record that the appellant was left with no choice but to deposit the amount with the respondent-Company and accordingly the appellant deposited the same in the year 1994. The appellant may have deposited in the name of previous owner M/s.Deep Wires Private Ltd. but as a matter of fact, the payment was actually made by the appellant from his own account. It cannot lie in the mouth of the respondent-Company to say that the arrears were paid by the erstwhile owner and not by the appellant and, therefore, the appellant has no locus to claim for refund of the sum relying on the decision in the case of Isha Marbles (supra). This contention on behalf of the respondent-Company deserves to be rejected outright.
We are of the view that on pronouncement of the Supreme Court in the case of Isha Marbles (supra), a legitimate right accrued in favour of the appellant herein to pray for refund of the requisite amount. As a matter of fact, we have noticed that in the earlier round of litigation the stand of the respondent-Company was also the same. The reason being that while disposing of Special Civil Application No.4698 of 1996 on October 28, 2009, the learned Single Judge recorded the submission of the learned counsel for the respondent-Company that where the dispute and/or controversy is prior to introduction of Condition 2(j), normally the Gujarat Electricity Board would reconsider the matter.
Whether this Court in exercise of powers under Article 226 of the Constitution of India can issue a writ of mandamus to the respondent-Electricity Company to refund the money realised from the appellant towards the dues of the erstwhile owner for the purpose of electric connection :
The writ-petition was preferred with the prayer for issue of writ of mandamus to the respondent to refund the money realised from the appellant towards the dues of the erstwhile owner M/s.Deep Wires Private Ltd. and, therefore, the reliefs sought in the writ-petition is in the nature of a claim for money.
18.1 This question was considered by the Supreme Court in the case of HMM Limited v. Administrator Bangalore City Corporation, (1989) 4 SCC 640 : (AIR 1990 SC 47), where the Apex Court ruled that realisation of tax or money without the authority of law is bad under Art. 265; the respondent-corporation, which is a statutory authority, has no right to retain the amounts; these are refundable. In that case the question was whether octroi could be levied or collected in respect of goods which are not used, consumed or sold within the municipal limits? The Court held that mere physical entry into the city limits would not attract the levy of octroi and putting the Horlicks power from drums to bottles for the purpose of exporting or taking these out of the city is neither use nor consumption of the Horlicks power attracting the levy of octroi. So these amounts become collection without the authority of law. In paragraph 13 of the judgment, the Supreme Court ordered (at page 53 of AIR) :
"We, therefore, hold that amounts should be refunded subject to the verification directed by the learned single Judge of the High Court of the amount of refund. The appeal is, thus, allowed. The judgment and the order of the Division Bench of the High Court are, therefore, set aside. In the facts and the circumstances, there will be no order as to costs."
18.2 A similar view was taken by the Supreme Court in the case of Salonah Tea Company Ltd. etc. v. The Superintendent of Taxes, Nowgong, (AIR 1990 SC 772). Therein the Supreme Court ruled that normally in a case where tax or money has been realised without the authority of law, the same should be refunded and in an application under Art. 226 of the Constitution the Court has power to direct the refund unless there has been avoidable laches on the part of the petitioner which indicate either the abandonment of his claims or which is of such nature for which there is no probable explanation or which will cause any injury either to respondent or any third party; it is true that in some cases the period of three years is normally taken as a period beyond which the Court should not grant relief but that is not an inflexible rule. It depends upon the facts of each case. In that case a Division Bench of the High Court of Gauhati in Assam passed a judgment setting aside the order and notices of demand but refused relief of refund claimed by the appellants. Aggrieved thereby, the appellants preferred the appeals before the Supreme Court with the prayer that directions be given to the respondents to refund the tax collected in pursuance of the illegal assessment orders. The Supreme Court, on consideration of the matter, allowed the appeals, set aside the judgment and order of the High Court to the extent that it refused refund of the tax illegally realised by the respondents.
18.3 Supreme Court in the case of Suganmal v. State of Madhya Pradesh, AIR 1965 SC 1740 in which a Constitution Bench considered the question of refund of tax and held that though the High Courts have power to pass any appropriate order in the exercise of the powers conferred on them under Art. 226 of the Constitution, a petition solely praying for the issue of a writ of mandamus directing the State to refund the money alleged to have been illegally collected by the State as tax is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit against the authority which had illegally collected the money as a tax and in such a suit it is open to the State to raise all possible defences to the claim, defences which cannot, in most cases, be appropriately raised and considered in the exercise of writ jurisdiction. While discussing the question, the Court made the following observation (at page 1742) :
"We have been referred to cases in which orders had been issued directing the State to refund taxes illegally collected, but all such cases had been those in which the petitions challenged the validity of the assessment and for consequential relief for the return of the tax illegally collected. We have not been referred to any case in which the Court were moved by petition under Art. 226 simply for the purpose of obtaining refund of money due from the State on account of its having made illegal exactions. We do not consider it proper to extend the principle justifying the consequential order directing the refund of amounts illegally realised, when the order under which the amounts had been collected has been set aside, to cases in which only orders for the refund of money are sought."
18.4 In the case of M/s Shree Baidyanath Ayurved Bhawan Pvt. Ltd. v. State of Bihar, 1996 (8) JT (SC) 177 : (AIR 1996 SC 2829), a Division Bench of the Supreme Court considered the previous decision in Salonah Tea Company Ltd. v. Superintendent of Taxes Nowgaon (supra) and Suganma v. State of Madhya Pradesh (supra) and held that the writ petition was not a run of the mill case; it was a case where the respondent-State had not acted as this Court has expected a high constitutional authority to act, in furtherance of the order of this Court; that is something that this Court cannot accept; the respondent-State was obliged by this Court's order to refund to the writ petitioners, including the appellants, the amounts collected from them in the form of the levy that was held to be illegal; if there was a good reason in law for rejecting the refund claim, it should have been stated; not to have responded to the appellants refund claim for 11 years and then to have turned it down without reason is to have acted disrespectfully to this Court. The Court further observed that even assuming, therefore, that this was a writ petition only for money, the writ petitioners fell outside the ordinary stream of writ petitioners, and, acting upon it, the High Court should have ordered the refund. The Supreme Court allowed the appeal, set aside the judgment of the Patna High Court, also allowed the writ petitions filed by the appellants, quashed the order of the State Government refusing refund and ordered the respondent State to pay the appellants a sum of Rs. 90,723/- with interest thereon at the rate of 12% per annum.
From the conspectus of the views expressed in the aforementioned decided cases, the position that emanates is that this Court has power to issue a writ/ direction to the respondent-Company to refund the amount illegally realised from the appellant towards the dues of electricity charges of the erstwhile owner of the factory premises.
In the aforesaid view of the matter, we come to the conclusion that the learned Single Judge materially erred in rejecting the petition and thereby refusing to grant relief to the appellant herein as prayed for in the main petition. We also do not find any disputed questions of facts. The facts of the case are eloquently clear. As a result of the same, we allow this appeal by quashing and setting aside the judgment passed by the learned Single Judge.
The appeal is hereby allowed with no order as to costs. The judgment of the learned Single Judge dated September 28, 2010 rendered in Special Civil Application No.4449 of 2010 is hereby quashed and set aside. Special Civil Application No.4449 of 2010 is hereby allowed. The communication/ decision of the respondent-Company dated January 19, 2010 is declared to be illegal, unjust and unreasonable and the respondent-Company is hereby directed to refund the amount of Rs.1,43,286/- to the appellant with interest at the rate of 12% per annum upto the year 1999 and thereafter at the rate of 8% per annum till the date of realisation.
(Bhaskar Bhattacharya, Acting C.J.) (J.B. Pardiwala, J.) Aakar Top