Madhya Pradesh High Court
Satguru Cemment Pvt. Ltd. Rajesh S/O ... vs The Superintending Engineer O And M M.P. ... on 2 November, 2020
Author: S.C.Sharma
Bench: S.C.Sharma
Writ Petition No.10659/2020
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HIGH COURT OF MADHYA PRADESH: BENCH AT INDORE
SINGLE BENCH : HON'BLE SHRI JUSTICE S.C. SHARMA
Writ Petition No.10659/2020
Satguru Cement Private Limited
versus
Superintending Engineer (O & M)
Shri S.C. Bagadia, learned senior counsel along with Shri Rohit
Saboo, learned counsel for the petitioner.
Shri Prasanna Prasad, learned counsel for the respondent.
ORDER
Delivered on this 2nd Day of November, 2020 Per: S.C. Sharma, J:
The petitioner before this Court, a Private Limited Company registered under the provisions of the Companies Act, 1956, has filed this present petition being aggrieved by the letter dated 10.07.2020 (Annexure-P/12) passed by the respondent, by which, the respondent has refused to grant permission for installation of new electricity connection sought by the petitioner / Company in its factory situated at Khasra Nos.26/1 and 37/1, Village - Karondia, Tehsil - Gandhwani, District - Dhar. The permission has been refused on account of the fact of non- payment of electricity dues of Dhar Cement Limited (a Company in liquidation).
02. The facts of the case reveal that Dhar Cement Limited (a Company in liquidation) was facing winding up proceeding and an order was passed on 27.11.2017 in Writ Petition No.10659/2020 -2- Company Petition No.17/2002 by this Court for sale of assets of the Company in liquidation. The petitioner / Company has purchased the assets of the Company in liquidation i.e., Dhar Cement Limited and took possession of the property. The petitioner / Company, on 18.07.2019, applied for High Tension Connection and also applied for Temporary High Tension Connection for a period of 16 months by submitting another application dated 19.09.2020.
03. The temporary connection was granted on 26.09.2019 to the petitioner / Company and on 01.11.2019, the Official Liquidator executed a sale deed in respect of assets of the Company in liquidation in favour of the petitioner / Company. The petitioner's contention is that as per Clause - 11 of the sale deed, the petitioner / Company was required to pay all the dues relating to Government / Semi Government / local authorities / other statutory bodies, if arises from the date of sale of confirmation i.e., w.e.f. 25.07.2017.
04. On 25.02.2020, the respondent issued a Provisional Sanction Letter in response to the application of the petitioner / Company dated 18.07.2019 for grant of 9000 KVA High Tension Connection and the petitioner / Company was required to execute an agreement within thirty days.
05. The petitioner / Company was required to deposit a sum of Rs.8,25,399/- as previous outstanding dues of Dhar Cement Limited. The petitioner / Company was also directed to pay a sum of Rs.2,82,11,300/- towards security deposit, Rs.9,32,431/- for supervision charges and Writ Petition No.10659/2020 -3- Rs.1,67,838 as service charges / GST. The petitioner / Company, on 06.03.2020, wrote a letter that as per Clause
- 11 of the sale deed, the petitioner / Company is not liable to pay Rs.8,25,299/-, the outstanding dues of Dhar Cement Limited (a Company in liquidation), however, the respondent, on 20.05.2020, has refused to waive the aforesaid amount. The petitioner has deposited all the amount demanded by the respondent and on 05.06.2020, the respondent directed the petitioner / Company to complete requisite formalities in respect of High Tension Agreement.
06. The officer of the petitioner / Company visited the office of the sole respondent and the petitioner / Company was directed to deposit a sum of Rs.1,98,62,418/- in respect of old outstanding dues of Dhar Cement Limited. On 07.07.2020, the petitioner / Company informed the Official Liquidator about the demand made by the respondent and the Official Liquidator has informed the petitioner / Company that the petitioner / Company is not required to pay the outstanding dues of Dhar Cement Limited and the dues will be adjudicated and settled as per the provisions of Section 529, 529-A and 530 of the Companies Act, 1956.
07. The respondent again issued a letter on 10.07.2020 directing the petitioner / Company to pay a sum of Rs.1,98,62,418/- and being aggrieved by the demand raised in the matter, the present writ petition has been filed. The contention of the petitioner / Company is that the electricity dues demanded by the respondent from the petitioner / Company are not the dues in respect of the Writ Petition No.10659/2020 -4- electricity consumed by the petitioner, they are the dues of Dhar Cement Limited (a Company in liquidation), and therefore, by no stretch of imagination, the dues can be recovered from the petitioner.
08. The petitioner / Company has raised another ground before this Court stating that the petitioner / Company has purchased the assets of the Company in liquidation in pursuance to the order passed by this Court and the sale deed has been executed by the Official Liquidator, and therefore, the petitioner / Company is not required to pay outstanding dues of Dhar Cement Limited (a Company in liquidation) and the amount has to be adjudicated by the Official Liquidator. The petitioner's contention is that by no stretch of imagination, the dues can be recovered from the petitioner / Company.
09. The petitioner has prayed for the following reliefs:-
(i) That, a writ, direction or order in the nature of mandamus or certiorari or as deemed fit be issued quashing the impugned letter dated 10.07.2020 (Annexure-P/12) in the entirety;
(ii) That, a writ, direction or order in the nature of mandamus or certiorari or as deemed fit be issued directing the respondent to refrain from demanding the alleged dues of Dhar Cement Ltd (in liquidation);
(iii) That, a writ, direction or order in the nature of mandamus or certiorari or as deemed fit be issued directing the respondent to issue electricity connection;
(iv) Any other relief which this Hon'ble Court deems fit be issued in favour of the petitioner ; or
(v) This petition may kindly be allowed with Writ Petition No.10659/2020 -5- costs.
10. A reply has been filed by the sole respondent opposing the prayer made by the petitioner / Company and as usual the first ground raised is availability of alternative remedy, however, it has not been stated that where is the alternative remedy available to the petitioner / Company. It has been stated that the present petition is not maintainable keeping in view the regulation framed by M.P. State Electricity Regulatory Commission.
11. It has been further stated that subject matter of the present petition is no longer res integra as the issue stands concluded on account of the judgments delivered in the cases of Isha Marbles v/s The Bihar State Electricity Board reported in (1995) 2 SCC 648, Ahmedabad Electricity Company Limited v/s Gujrat Inns Private Limited reported in (2004) 3 SCC 587, Pashchimanchal Vidyut Vitran Nigam Limited & Others v/s DVS Steels and Alloys Private Limited & Others reported in (2009) 1 SCC 210, Dakshin Haryana Bijli Vitran Nigam Limited v/s Paramount Polymers (P) Limited reported in (2006) 13 SCC 101, Dakshin Haryana Bijli Vitran Nigam Limited & Another v/s Excel Buildcon Private Limited reported in (2008) 10 SCC 720, Haryana State Electricity Board v/s Hanuman Rice Mills, Dhanauri & Others reported in (2010) 9 SCC 145, Hyderabad Vanaspati Limited v/s Andhra Pradesh State Electricity Board & Others reported in (1998) 4 SCC 470, Suraj K.R. v/s Secretary, Kerela State Electricity Board & Another reported in AIR 2006 Kerela 194, Special Officer (Commerce), North Eastern Electricity Supply Company Writ Petition No.10659/2020 -6- ORRISSA (NESCO) & Another v/s Raghunath Paper Mills Private Limited & Another reported in (2012) 13 SCC 479 and Telangana State Southern Power Distribution Company Limited & Another v/s M/s Srigdhaa Beverages reported in 2020 SCC OnLine SC
478.
12. The stand of the respondent is that the present petition is not at all maintainable before this Court and the petitioner is liable to pay the amount in the backdrop of the amendment made by the M.P. State Electricity Regulatory Commission. It has been stated that the Official Liquidator has not been impleaded as respondent and the outstanding dues are to be recovered from the petitioner only.
13. It has also been stated that in the company petition i.e., Company Petition No.17/2002, the Electricity Distribution Company has preferred an application i.e., I.A. No.6303/2013 and during the course of the hearing before this Court, the promoters of the company have expressed their desire to make the payment, and therefore, the Interlocutory Application preferred by the Electricity Distribution Company was disposed of with a liberty to the Electricity Company to recover the dues in accordance with law, and therefore, the dues are being recovered in accordance with law. The contention of the respondent is that they are rightly recovering the dues in the matter.
14. A rejoinder has also been filed by the petitioner / Company and it has been stated that pursuant to the orders passed by the learned Company Judge in respect of Company in liquidation, an Official Liquidator was appointed and the Official Liquidator took possession of Writ Petition No.10659/2020 -7- the assets of the Company on 24.09.2003. The Official Liquidator has conducted an e-auction and the petitioner was a successful bidder. It has been stated that from a bare perusal of the auction, notice and sale deed executed in favour of the petitioner / Company, it is evident that the petitioner / Company is not liable to pay dues of whatsoever nature up to the date of winding up order and the same would be treated as debt of the Company and the same shall be dealt by the Official Liquidator in accordance with law subject to approval of the Company Judge / Court. It has been stated that the respondent is not at all entitled to recover the outstanding dues from the petitioner / Company. A prayer has been made for quashment of the impugned letter.
15. Heard learned counsel for the parties at length and perused the record. The matter is being disposed of at motion hearing stage itself with the consent of the parties through video conferencing.
16. The undisputed facts of the case reveal that the petitioner before this Court is a Company registered under the provisions of the Companies Act, 1956 and engaged in the business of manufacturing cement. Dhar Cement Limited, again a Company registered under the provisions of the Companies Act, 1956, was subjected to winding up proceeding and a company petition was filed in the year 2002, the same was registered as Company Petition No.17/2002 and the respondent before this Court has preferred an application i.e., I.A. No.6303/2013, for recovery of outstanding dues against Dhar Cement Limited. The learned Company Judge has passed an order Writ Petition No.10659/2020 -8- on 31.01.2014 in respect of the claim of the respondent and paragraphs - 27 and 30 of the aforesaid order read as under:-
27. So far as the I.A. No.6303/2013 is concerned, it is an I.A. filed by the Electricity Board claiming arrears of electricity charges from the Company in liquidation. Counsel for the applicant-promoter/contributory has fairly stated before this Court that these charges would be paid by the applicant in accordance with law, therefore, I.A. No.6303/2013 is disposed of leaving it open to the applicant-Electricity Board to recover the arrears of electricity charges from the applicant- Company in accordance with law.
30. So far as Company Petition No.17/2002 is concerned, In view of the above in terms of Section 466 of the Companies Act, the following directions are issued :-
i. Further proceedings of liquidation shall remain permanently stayed.
ii. The official liquidator shall handover the assets of the Company in liquidation to the applicant promoter/contributory. Iii. The inventory of the assets including the full details of the land, will be prepared and appropriate photographs as well as videography of the handing over and taking over possession of the assets will be undertaken by O.L. iv. The applicant-promoter/contributory and the other concerning directors of the Company shall remain prohibited from transferring, alienating or parting with possession of any of the assets of the Company without the leave of the Court. This will not preclude the applicant- romoter to approach the financial institutions for financial assistance and seek creation of charge on the assets of the Company-in-Liquidation by the financial institutions.
v. The applicant-promoter will submit six monthly report to the O.L. till the time the Company becomes fully operational.
vi. The O.L. shall immediately make available the records of the company and handover the same to the authorized representatives of the Company. Vii. All the expenses incurred by the O.L. till the handing over of the assets of the Company-in- Liquidation including the expenses for handing over, will be borne by the applicant-promoter. Viii. Company Petition No.17/2002 will Writ Petition No.10659/2020 -9- remain pending only for the limited purpose of permitting any of the ex worker of the Company to file an appropriate application before this Court, having grievance against the adjudication of his claim by the Claim Committee constituted by this order.
ix. In case if the applicant-
promoter/contributory withdraws from the scheme, then he would immediately inform the O.L. and the O.L. will be at liberty to file an appropriate application for review of this order. x. The promoter before this Court will furnish a copy of this order to the Registrar of Companies forthwith for taking necessary action in terms of Section 466(3) of the Act.
xi. The I.A. No.828/2013 in Company Petition No.17/2002 is accordingly disposed of."
The aforesaid order makes it very clear that some statement was made by the counsel for the promoter before the learned Company Judge in respect of arrears of electricity charges and it was stated that the same shall be paid by the promoters of Dhar Cement Limited and in light of the statement made by the promoters, I.A. No.6303/2013 was disposed of leaving it open to the respondent / Electricity Board to recover the arrears of electricity from the applicant / Company in accordance with law i.e. from Dhar Cement Limited.
17. This Court really fails to understand as to how and as to why the respondent (Electricity Board) has not objected to the statement made by the promoter (Dhar Cement Limited). The respondent before this Court was certainly entitled to agitate the matter to claim its outstanding dues before the learned Company Judge. In case, the aforesaid order was passed, this Court really fails to understand as to why a company appeal was not preferred and as to why the respondent has abandoned their claim before the learned Company Judge.
Writ Petition No.10659/2020 -10-18. Pursuant to the orders passed by this Court for conducting an e-auction, on 08.08.2017, steps were taken for auctioning the assets of the property and an advertisement was issued by the Official Liquidator.
19. In Company Petition No.17/2002, OLR Nos.67/2017 and 72/2017 were filed in respect of confirmation of sale in respect of Lot No.3, in respect of which, the petitioner was the highest bidder and the learned Company Judge by an order dated 27.11.2017 has confirmed the sale. Order dated 27.11.2017 reads as under:-
"Heard.
OLR No.67/2017 has been filed for accepting the highest bid of Rs.85,37,000/- given by M/s Satguru Cement Pvt. Ltd. in respect of sale of the assets in Lot No.3.
It has been pointed out by the learned counsel for the O.L. that in pursuance to the directions issued by this court on 8.8.2017 the steps were taken for auctioning the assets of Lot No.3 and due publication was made. Thereafter 2 offers were received. The offer of Satguru Cement Pvt. Ltd. was the highest offer.
This court on 30.10.2017 had permitted all the parties to obtain copy of this OLR and file their objection/reply. On 13.11.2017, Shri Panwar learned counsel for the Workers Union had raised a submission that in the auction notice Annx.A to the OLR the particulars of the properties which were put to auction were not fully mentioned. Consequently the O.L. has filed OLR No.72/2017 placing on record the auction notice Annx.'A' and disclosing that in note (vii) of the said auction notice, the prospective buyers were givmmen the opportunity to visit the office of O.L. and obtain the details of the properties in Lot No.3. He has submitted that since a number of piece of land of different Khasra numbers were involved therefore same were not mentioned in the auction notice but sufficient particulars were given. He has also drawn attention of this court to para 6 of OLR No.72 of 2017 which contains the following details of the properties which have been sold in Lot No.3 :-Writ Petition No.10659/2020 -11-
Khasra Nos. Area (Hectare) Total area Village (Hec) 4 2.000 8.14 Karnodiya 24 0.141 26/1 3.000 26.3 36 3.000 361/1 7.108 7.108 Ghurshal 365/1 367/1 368/1 72/1 1.500 1.500 Attersuma 75/1 36/1 1.414 1.714 Karnodia 37/1 18.463 18.463 Shri Panwar, counsel for the workers Union fairly submits that after disclosure of details of the properties which have been put to auction,the grievance of the workers no longer survives.
Having regard to the aforesaid and considering the fact that nobody has come forward to object to the sale of the assets of Lot No.3 to M/s Satguru Cement Pvt. Ltd. and also taking note of the circumstances which are disclosed in the aforesaid OLR, I am of the opinion that prayer made in the OLR deserves to be allowed.
Accordingly OLR No.67/2017 and 72/2017 are disposed of by confirming the sale of the assets of Lot. No.3 in favour of Satguru Cement Pvt. Ltd. with a direction to the said auction purchaser to deposit the balance sale consideration of Rs.73,37,000/- after adjustment of AMD of Rs.12 Lacs within a period of 30 days from today. On deposit of the said amount the O.L. will handover the assets of Lot No.3 to M/s Satguru Cement Pvt. Ltd..
O.L. is also permitted to refund the EMD of M/s Abu Industries Ltd., Indore which was the second highest bidder after receipt of the full consideration amount from the highest bidder M/s Satguru Cement Pvt. Ltd..
The OLRs are accordingly disposed of.
I.A.Nos.2616/2016 & 7060/2015 Shri V.Atre, learned counsel for respondent-one of the Promotor has pointed out that I.A.Nos.2616/2016 and 7060/2015 have already been disposed of yet these I.As. have been listed today for consideration.
Writ Petition No.10659/2020 -12-Office is directed to examine and not to list the I.As. which are already disposed of.
Shri Atre also seeks permission to withdraw I.A.No.2608/2016.
Prayer is allowed.
I.A.No.2608/2016 is accordingly dismissed as withdrawn. List on 22.1.2018."
20. A sale deed was executed by the Official Liquidator in the matter and paragraph - 10 of the sale deed reads as under:-
"10. That, the dues if any, of the company (in- Liqn.) up to date of winding up order passed by the Hon'ble High Court of Madhya Pradesh, Indore Bench will be treated as debt / claim against the company (in Liqn.) and may be dealt by the Vendor (Official Liquidator) in accordance with law subject to approval of Hon'ble Hight Court of M.P. Indore Bench. The Vendee / Auction Purchaser shall liable to pay all dues relating to Government / semi-Government / local / authorities / other statutory dues, if any arises from the date of confirmation of sale of above assets / properties as described under Lot No.2 & 3 of the Company (in Liqn) by the Hon'ble High court i.e. from 25.07.2017 and 27.11.2017 respectively."
Undisputedly, in the present case, the dues, which are subject matter of the present writ petition, are dues prior to 25.07.2017.
21. Learned counsel for the petitioner was fair enough in making a statement before this Court that dues after 27.07.2017 will be paid by the petitioner, however, the respondent cannot recover the dues from the petitioner, which are electricity dues as they are dues prior to 27.07.2017 in light of the sale deed executed in favour of the petitioner and in light of the fact that the respondent has foregone the claim before the Company Judge on an assurance given by promoter of the Company (Dhar Cement Limited).
Writ Petition No.10659/2020 -13-22. The stand of the respondent is that the petitioner is having an alternative remedy, however, the forum, where the alternative remedy is available, has not been mentioned in the reply.
23. In the considered opinion of this Court, even if there is an alternative remedy as stated in the reply, the petitioner cannot be thrown out on the ground of availability of alternative remedy in the peculiar facts and circumstances of the case.
24. The respondent has also placed reliance upon the amendment made by M.P. State Electricity Regulatory Commission dated 25.11.2019 in the Electricity Supply Code and Clause 4.12 reads as under:-
4.12. If the consumer, in respect of an earlier agreement executed in his name or in the name of a firm or company with which he was associated either as a partner, director or managing director or as occupier and / or owner of the premises, has any arrears of electricity dues or other dues for the premises where the new connection is applied for and such dues are payable to the licensee the requisition for supply may not be entertained by the licencee until the dues are paid in full. In case of a person occupying a new property, it will be the obligation of that person to check the bills for the previous months or in case of disconnected supply, the amount due as per the licencee's record immediately before his occupation and ensure that all outstanding electricity dues as specified in the bills are duly paid up and discharged. The licensee shall be obliged to issue a certificate of the amount outstanding from the connection that was installed or is installed in such premises on request made by such person. the lecensee may refuse to supply electricity to such premises through the already existing connection having dues or refuse to give a new connection to such premises till such outstanding dues to the licensee are paid in full.
Provided that release of new connections to such premises shall not be refuse by the distribution Licensee in following cases :-
(i) On vacation of government quarter / falt on transfer of an employee leaving arrears Writ Petition No.10659/2020 -14- of electricity charges, new occupant shall not be required to pay the electricity dues of erstwhile consumer.
(ii) If there is a specific order from a court for non-recovery of arrears outstanding on the premises."
The aforesaid clause is certainly not at all applicable in the facts and circumstances of the present case. In the present case during the pendency of the company petition, the respondent has filed an Interlocutory Application claiming its dues and on the basis of some assurance given by the promoter of Dhar Cement Limited, the respodnent has not proceeded further against the Dhar Cement Limited in respect of the dues. The respondent did not object to the disposal of the Interlocutory Application, they in fact abandoned their claim before the learned Company Judge, they were having the forum to recover the amount but for the reasons best known to the officers of the respondent / Company, the order passed by the learned Company Judge was not challenged and no claim of whatsoever kind was made before the Company Judge at a later stage, and therefore, the aforesaid regulation, in the peculiar facts and circumstances of the case, will not come in way of the present petitioner.
25. The respondent has also placed reliance upon a judgment delivered in the case of Isha Marbles (supra). Paragraph - 63 of the aforesaid judgment reads as under:-
"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, behighly 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 Writ Petition No.10659/2020 -15- 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."
It is certainly true that dishonest consumer cannot be allowed to play truant with public property, however, in the present case, the fact speaks otherwise. The officers of the respondent / Company were having a right to claim the dues before the Company Judge, however, on the basis of assurance given by the promoter of Dhar Cement Limited (the Company in liquidation), they have literally abandoned the claim before the learned Company Judge, and therefore, this is a case where a fact finding inquiry should have been done as to why the officer of the respondent / Company have abandoned the claim before the learned Company Judge and did not do anything after an order was passed by the Company Judge solely based upon the assurance given by the promoter of the Dhar Cement Limited, Hence the judgment relied upon in the aforesaid case is of no help to the respondent.
26. In the case of Ahmedabad Electricity Company Limited (supra), the Hon'ble Supreme Court in paragraph - 3 has held as under:-
"3. We are clearly of the opinion that in case of a fresh connection though the premises are the same, the auction purchasers cannot be held liable to clear the arrears incurred by the previous owners in respect of power supply to the premises in the absence of there being a specific statutory provision in that regard. Though we find some Writ Petition No.10659/2020 -16- merit in the submission of the learned counsel for the appellant calling for reconsideration of the wide propositions of law laid down in Isha Marbles' case (supra), we think the present one is not a case for such exercise. We leave the plea open for consideration in an appropriate case."
In the aforesaid case, the auction purchaser were not held liable to clear the dues incurred by the previous owner.
27. The respondents has also placed reliance upon a judgment delivered in the case of Paschimanchal Vidyut Vitran Company Limited (supra). Paragraphs - 10 to 12 of the aforesaid judgment read as under:-
"10. But the above legal position is not of any practical help to a purchaser of a 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.
11. 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 Writ Petition No.10659/2020 -17- 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. 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.
12. 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. It is relevant to note that when the said amount was demanded and paid, there was no injunction or stay restraining the appellant from demanding or receiving the dues."
In the aforesaid case, it has been held that the distributor of the Electricity Company can stipulate the terms and conditions in respect of the supply of electricity even if the rules and regulations are salient. The aforesaid judgment also does not help the respondent.
28. Reliance has also been placed upon several judgment, as mentioned in earlier paragraph, however, the present case is having a distinguishable feature on the following grounds :-
Writ Petition No.10659/2020 -18-(a) In the sale deed executed in favour of the petitioner, the petitioner / Company is not liable to pay the electricity dues i.e., dues prior to 2017 and undisputedly, the present case, the dues in question are prior to 2017;
(b) The property was sold on account of an order passed by the learned Company Judge in Company Petition No.17/2002 and there was an application preferred by the respondent claiming its dues. The respondent / Company was so much influenced by the statement made by the promoter of Dhar Cement Limited (a Company in liquidation) that they will be paying electricity dues, that they did not agitate their claim further when their Interlocutory Application was disposed of.
They were satisfied with the fact that the promoter was going to pay their dues.
29. Shri Prasanna Prasad has placed reliance upon a judgment delivered in the case of Telangana State Southern Power distribution Company Limited & Another v/s Srigdha Beverages reported in 2020 SCC OnLine SC 478, which is a latest judgment on the subject deliveredby the Hon'ble Supreme Court.
30. In the aforesaid case, Srigdhaa Beverages, an auction purchaser of the Unit, was aggrieved by the liability fastened upon them on account of previous electricity dues of the last owner and the Hon'ble Supreme Court in paragraph - 7 to 17 has held as under:-
"7. We may also take note of the fact that the aforesaid dues partake the character of statutory dues under the Electricity Act, 2003 read with the General Terms & Conditions of Supply.
8. A writ petition was filed by the respondent before the High Court of Telangana and Andhra Pradesh seeking quashing of these demands predicated on a reasoning that as a subsequent purchaser, the respondent was not responsible for the dues of the earlier owner, and in that behalf relied upon the judgments of this Court in Isha Marbles v. Bihar State Electricity Board & Writ Petition No.10659/2020 -19- Anr.1 and Southern Power Distribution Company of Telangana Limited (through its CMD) & Ors. v. Gopal Agarwal & Ors.2 Reliance on these judgments persuaded the learned single Judge to issue directions quashing the demand of appellant No.1. The appeal filed 1 (1995) 2 SCC 648 2 (2018) 12 SCC 644 before the Division Bench against this order was also dismissed on 30.4.2018.
9. We have examined the submissions in the contours of the aforesaid controversy, and take note of the fact that in the case of Isha Marbles,3 the sale was in pursuance of Section 29(1) of the State Financial Corporations Act, 1951, but the important aspect was that there was no clause specifically dealing with the issue of electricity dues or such other dues, as in the present auction notice. This Court elucidated the position in the context of Section 24 of the Electricity Act, 1910, to emphasise that under Section 2(c) of the Electricity Act, a consumer means any person who is supplied with energy, and since liability to pay electricity dues is fastened only on the consumer, at the relevant time, the purchaser was not the consumer. It has also been stated that in the absence of consumption of electricity, the subsequent purchaser was merely seeking reconnection without there being any statutory dues towards consumption charges. We had specifically posed a question to the learned counsel for the respondent in the order dated 15.11.2019, that whether, in the context of the judicial pronouncements sought to be relied upon, there was a 3 (supra) specific clause in the nature of Clause 26 as in the present E-auction sale notice, which absolved the Authorized Officer of various dues including "electricity dues". On the conspectus of the judgments referred to by the respondent, there were no such clauses in the cases in question.
10. We may also notice that there have been subsequent judicial pronouncements dealing with this aspect of electricity dues. A three Judge Bench of this Court has held that the dues under the terms and conditions of supply partake the character of statutory dues (Hyderabad Vanaspathi Ltd. v. A.P. State Electricity Board & Ors. 4). The mere fact that agreements were entered into with every consumer only served the purpose of bringing to the notice of the consumer the terms and conditions of supply, but did not make the dues purely contractual in character.
11. We can draw strength from the Writ Petition No.10659/2020 -20- observations of this Court in Dakshin Haryana Bijli Vitran Nigam Ltd. v. Paramount Polymers (P) Ltd.,5 where there was a similarity as in the present case, of a specific clause dealing with electricity dues. It was observed that in such a scenario if a transferee desires to enjoy the service connection, he shall 4 (1998) 4 SCC 470 5 (2006) 13 SCC 101 (2 Judges Bench) pay the outstanding dues, if any, to the supplier of electricity and a reconnection or a new connection shall not be given to any premises where there are arrears on account of dues to the supplier unless they are so declared in advance.
12. We may also notice that as an auction purchaser bidding in an "as is where is, whatever there is and without recourse basis", the respondent would have inspected the premises and made inquiries about the dues in all respects. The facts of the present case, as in the judgment aforesaid, are more explicit in character as there is a specific mention of the quantification of dues of various accounts including electricity dues. The respondent was, thus, clearly put to notice in this behalf.
13. The same view in case of a similar clause has been taken in Paschimanchal Vidyut Vitran Nigam Limited & Ors. v. DVS Steels and Alloys Private Limited & Ors.6 It has been further observed that 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 so long as such rules and regulations or the terms and conditions are not arbitrary and 6 (2009) 1 SCC 210 (2 Judge Bench) unreasonable.
A condition for clearance of dues cannot per se be termed as unreasonable or arbitrary.
14. We may notice a slightly contra view in Haryana State Electricity Board v. Hanuman Rice Mills, Dhanauri & Ors., 7 in a given scenario where the pendency of electricity dues was not mentioned in the terms & conditions of sale, and it was held in those facts that the dues could not be mulled on to the subsequent transferee.
15. We may notice that in Special Officer, Commerce, North Eastern Electricity Supply Company of Orissa (NESCO) v. Raghunath Paper Mills Private Limited & Anr.,8 a distinction was made between a connection sought to be obtained for the first time and a reconnection. In that case, no application had been made for transfer of a service connection from the previous owner to the auction-purchaser, but in fact, a fresh connection was requested. In light of the regulations therein, Writ Petition No.10659/2020 -21- previous dues had to be cleared only in the case of a reconnection. Hence, the respondents were held to be free from electricity liability. This Court in Southern Power Distribution Company of Telangana Limited (through its CMD) & Ors. 9 found that the facts were similar to 7 (2010) 9 SCC 145 (2 Judge Bench) 8 (2012) 13 SCC 479 (2 Judge Bench) 9 (supra) the NESCO10 case, and thus followed the same line.
16. We have gone into the aforesaid judgments as it was urged before us that there is some ambiguity on the aspect of liability of dues of the past owners who had obtained the connection. There have been some differences in facts but, in our view, there is a clear judicial thinking which emerges, which needs to be emphasized:
16.1. That electricity dues, where they are statutory in character under the Electricity Act and as per the terms & conditions of supply, cannot be waived in view of the provisions of the Act itself more specifically Section 56 of the Electricity Act, 2003 (in pari materia with Section 24 of the Electricity Act, 1910), and cannot partake the character of dues of purely contractual nature. 16.2. Where, as in cases of the E-auction notice in question, the existence of electricity dues, whether quantified or not, has been specifically mentioned as a liability of the purchaser and the sale is on "AS IS WHERE IS, WHATEVER THERE IS AND WITHOUT RECOURSE BASIS", there can be no doubt 10 (supra) that the liability to pay electricity dues exists on the respondent (purchaser).
16.3 The debate over connection or reconnection would not exist in cases like the present one where both aspects are covered as per clause 8.4 of the General Terms & Conditions of Supply.
17. In view of the aforesaid legal position, which has emerged, we are of the view that the impugned orders cannot be sustained and are accordingly set aside while opining that appellant No.1 would be well within its right to demand the arrears due of the last owner, from the respondent-
purchaser."
31. This Court has carefully gone through the aforesaid judgment, however, in the present case, the facts are distinguishable. The property was certainly sold on whatever there is basis, however, in the sale deed it has Writ Petition No.10659/2020 -22- been clearly mentioned that the auction purchaser is not at all liable to pay dues prior to 27.11.2017. The sale was arising out of a company petition and Indian Companies Act, 1956 provides for recovery of outstanding dues in a company petition, there is a procedure prescribed under the statute and the respondent did avail that opportunity of recovery of dues by filing an Interlocutory Application before the learned Company Judge i.e., I.A. No.6303/2013 and a statement was made by the applicant promoter / contributory (Dhar Cement Limited, a Company in liquidation) that the electricity charges would be paid by the applicant in accordance with law (by Dhar Cement Limited) and in those circumstances, I.A. No.6303/2013 was disposed of. Nothing prevented the respondent / Company to prefer a subsequent application before the Company Judge after sale of the property claiming their dues. For the reasons best known to the respondent, they kept quiet over the matter and there was no whisper at a later stage in respect of the dues of the Electricity Board before the learned Company Judge nor the order passed by the learned Company Judge dated 31.01.2014 was challenged at any point of time before any forum. A sale deed was executed by the Official Liquidator in which, it has been categorically mentioned that dues prior to 27.11.2017 will not be recovered from the present petitioner. The learned Company Judge has affirmed the sale deed and it was executed pursuant to the order passed by the learned Company Judge and the same has not been challenged before any forum.
32. In the considered opinion of this Court, the Writ Petition No.10659/2020 -23- question of recovering the dues from the petitioner, in the peculiar facts and circumstances of the case, does not arise.
33. This Court, in the present case, is witnessing objectionable stand of the respondent. In case, an application was preferred before the learned Company Judge for claiming electricity charges, the same should have been defended and claim should not have been relinquished only on account of an assurance given by the promoter. It requires a fact finding inquiry as to why nothing was done after an order was passed on 31.01.2014 when the application of the respondent / Company was disposed of on the basis of assurance given by the promoter. The Managing Director of the Company shall conduct a fact finding inquiry and shall also be free to fix responsibility and to take action in accordance with law against the persons who are held responsible in the matter. It is needless to mention that the respondent shall also take appropriate steps in accordance with law for recovering the dues form the promoters of Dhar Cement Limited / from the assets held by the promoter of Dhar Cement Limited keeping in view the order passed by the learned Company Judge in Company Petition No.17/2002 dated 31.01.2014 as the promoters have made a statement before the learned Company Judge that they are paying the entire outstanding dues. The exercise of taking appropriate steps in accordance with law and recovering the outstanding dues form the promoters be concluded within a period of six months from the date of receipt of certified copy of this order. The exercise of holding an inquiry, as directed by this Court, be completed within a period of three months Writ Petition No.10659/2020 -24- from the date of receipt of certified copy of this order.
35. Resultantly, the demand of letter dated 10.07.2020 (Annexure-P/12) is quashed. The respondent is restrained from demanding / recovering the dues of Dhar Cement Limited (a Company in liquidation) from the present petitioner.
With the aforesaid, the present writ petition stands allowed.
Certified copy, as per rules.
(S.C. SHARMA) JUDGE Ravi Digitally signed by Ravi Prakash Date: 2020.11.03 14:18:28 +05'30'