Calcutta High Court (Appellete Side)
Damodar Valley Corporation & Ors vs Shree Ramdoot Rollers Private Ltd on 24 April, 2020
Author: Dipankar Datta
Bench: Dipankar Datta
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
PRESENT:
Hon'ble Justice Dipankar Datta
and
Hon'ble Justice Protik Prakash Banerjee
FMA 956 OF 2019
Damodar Valley Corporation & ors.
vs.
Shree Ramdoot Rollers Private Ltd.
For the appellants : Mr. Anindya Kumar Mitra, Sr. Advocate,
Mr. Pradip Tarafdar, Advocate,
Mr. Subir Pal, Advocate.
For the respondent : Mr. Jayanta Kumar Mitra, Sr. Advocate,
Ms. Hashnuhana Chakraborty, Advocate,
Mr. Debajyoti Manna, Advocate,
Ms. Moumita Bhattacharjee, Advocate,
Heard on : January 2, 3, 15, 27 & 28 and February 11 & 19, 2020
Judgment on : April 24, 2020
Dipankar Datta, J.:
1. The legality and propriety of a judgment and order dated June 19, 2019 of a learned Judge of this Court, practically allowing W.P. 10085(W) of 2019 presented by the writ petitioner (the respondent before us), is questioned in this intra-court writ appeal. Communications dated May 10 and 17, 2019 issued by the appellants were quashed by His Lordship and it was observed that they are obliged to supply electricity to the writ petitioner after effecting connection within four weeks, without the writ petitioner being liable to pay any dues of the previous consumer, M/s. Capricorn Ispat Udyog Pvt. Ltd. (hereafter Capricorn).
2. A question of seminal importance arises for decision in this appeal, i.e., whether the appellants are justified in insisting that as a condition precedent for supplying electricity to it, the writ petitioner is required to clear the outstanding dues of Capricorn inclusive of delayed payment surcharge (hereafter DPS)?
3. It would be appropriate at this stage to note the decisions of the Supreme Court cited by the parties on the point as to whether a distribution licensee of electricity is entitled in law to claim liquidation of the dues left behind by a defaulting consumer from an intending consumer while the latter seeks supply of electricity upon taking over the property of the former by participating in proceedings initiated to enforce mortgages and clearance of the dues of its creditors.
4. Isha Marbles vs. Bihar State Electricity Board, reported in (1995) 2 SCC 648, is the first in the sequence of several decisions rendered by the Supreme Court. It was, however, a case to which the Electricity Act, 1910 (hereafter the old Act) applied. The conclusions drawn are reproduced below:
"61. What we have discussed above appears 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. Hence, the courts must be zealous in this regard. 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 lakhs and lakhs of rupees and each one of them can easily say that he is not liable for the liability of the predecessor in interest. No doubt, dishonest consumers cannot be allowed to play truant with the public property but inadequacy of the law can hardly be a substitute for overzealousness. ..."
(emphasis supplied)
5. Ahmedabad Electricity Co. Ltd. vs. Gujarat Inns Pvt. Ltd., reported in (2004) 3 SCC 587 = AIR 2004 SC 2171, was another case arising from the old Act. While observing that the wide propositions of law laid down in Isha Marbles (supra) merited reconsideration, the Court held 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". (emphasis supplied)
6. Then came the decision in Dakshin Haryana Bijli Vitran vs. Paramount Polymers (P) Ltd., reported in (2006) 13 SCC 101 = AIR 2007 SC 2, pertaining to another case under the old Act. The Court was called upon to consider clause 21- A inserted in the Terms and Conditions of Supply of electrical energy by the appellant. The relevant high court held that newly inserted clause 21-A was not applicable to the first respondent since the sale of the undertaking in question and handing over of possession thereof at the instance of the Financial Corporation were prior to insertion of the said clause. After considering Isha Marbles (supra) and noting that the high court had no occasion to consider whether clause 21-A was invalid, the matter was remitted to the high court for a fresh decision according to law with liberty to the first respondent to amend its writ petition. In the process, the Court held:
"16. The position obtaining in Isha Marbles 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 21-A 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 clauses like clause 21-A in the Terms and Conditions of Supply. We are therefore of the view that the decision in Isha Marbles cannot be applied to strike down the condition imposed and the first respondent has to make out a case independent on the ratio of Isha Marbles, 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 therefore does not arise in this case especially in view of the fact that the High Court has not considered the question whether clause 21-A of the Terms and Conditions incorporated is invalid for any reason."
(emphasis supplied)
7. Next in line, chronologically speaking, are the decisions in Paschimanchal Vidyut Vitran Nigam Limited vs. DVS Steels and Alloys Private Limited, reported in (2009) 1 SCC 210 = AIR 2009 SC 647, and Haryana State Electricity Board vs. Hanuman Rice Mills, Dhanauri, reported in (2010) 9 SCC 145, authored by the same learned Judge.
8. In DVS Steels and Alloys Private Limited (supra), none of the aforesaid preceding decisions appear to have been placed for consideration. However, paragraphs 11 to 14 thereof are instructive and hence, reproduced below:
"11. The supply of electricity by a distributor to a consumer is 'sale of goods'. The distributor as the supplier, and the owner/occupier of a premises with whom it enters into a contract for supply of electricity are the parties to the contract. 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. The supplier can therefore neither file a suit nor initiate revenue recovery proceedings against a purchaser of a premises for the outstanding electricity dues of the vendor of the premises in the absence of any contract to the contrary.
12. 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 fulfilment 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.
13. A stipulation by the distributor that the dues in regard to the electricity supplied to the premises should be cleared before electricity supply is restored or a new connection is given to a premises, cannot be termed as unreasonable or arbitrary. In the absence of such a stipulation, an unscrupulous consumer may commit defaults with impunity, and when the electricity supply is disconnected for non-payment, may sell away the property and move on to another property, thereby making it difficult, if not impossible for the distributor to recover the dues. Having regard to the very large number of consumers of electricity and the frequent moving or translocating of industrial, commercial and residential establishments, provisions similar to Clauses 4.3(g) and (h) of the Electricity Supply Code are necessary to safeguard the interests of the distributor.
14. We do not find anything unreasonable in a provision enabling the distributor/supplier to disconnect electricity supply if dues are not paid, or where the electricity supply has already been disconnected for non- payment, insist upon clearance of arrears before a fresh electricity connection is given to the premises. It is obviously the duty of the purchasers/occupants of premises to satisfy themselves that there are no electricity dues before purchasing/occupying a premises. They can also incorporate in the deed of sale or lease, appropriate clauses making the vendor/lessor responsible for clearing the electricity dues up to the date of sale/lease and for indemnity in the event they are made liable. Be that as it may."
(emphasis supplied)
9. Hanuman Rice Mills, Dhanauri (supra) did consider all but one of the aforesaid decisions and the propositions of law were summarised in paragraph 12 in the following words:
"12. The position therefore may be summarised 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, authorise the supplier of electricity to demand from the purchaser of a property claiming reconnection 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."
(emphasis supplied)
10. The penultimate in the series of decisions is Special Officer, Commerce, North Eastern Electricity Supply Company of Orissa (NESCO) vs. Raghunath Paper Mills Private Limited, reported in (2012) 13 SCC 479. After considering the law laid down in each of the aforesaid decisions except Paramount Polymers (P) Ltd. (supra), the Court held in paragraph 21 as follows:
"21. In the light of the above discussion, specific factual details regarding the position of Respondent 1 which purchased the said premises under court auction-sale from the Official Liquidator on 'as-is-where-is' and 'whatever-there-is' basis and in the light of the Regulations quoted above, particularly, sub-clause 10(b) of Regulation 13, we hold that the request was not for the transfer from the previous owner to the purchaser, on the other hand, it was a request for a fresh connection for the unit of Respondent 1 herein. We are in entire agreement with the decision arrived at by the learned Single Judge as affirmed by the Division Bench of the High Court."
11. The last of the decisions is Southern Power Distribution Company of Telangana Ltd. vs. Gopal Agarwal, reported in (2018) 12 SCC 644 = AIR 2017 SC 3862. Referring to the decisions in Isha Marbles (supra), Gujarat Inns Pvt. Ltd. (supra) and Raghunath Paper Mills Private Limited (supra), the Court observed that since the property had been put up for auction sale on "as is where is" basis and the first respondent (auction purchaser) had applied for a fresh connection without in any way being connected to the past owner, and without having undertaken to pay the arrears of the past owner, the request of the auction purchaser should not have been rejected. The appeal was consequently dismissed and the decision of the high court upheld.
12. The summary of the propositions of law in Hanuman Rice Mills, Dhanauri (supra) can profitably be taken as the guide for answering the question formulated in paragraph 2 above. In view of the statement of law in paragraph 12
(ii) of the said decision, such question, as of necessity, has to be answered bearing in mind the relevant provisions contained in the Electricity Act, 2003 (hereafter the new Act) and other relevant provisions, which would obviously include, for the purposes of the present case, the West Bengal Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2013 (hereafter the 2013 Regulations). Admittedly, the 2013 Regulations are the governing statutory provisions in relation to supply of electricity to a consumer in West Bengal by all licensees, including the appellants. The relevant provisions of the Damodar Valley Corporation Act, 1948 (hereafter the DVC Act) and the agreement for supply between the appellant no.1 and Capricorn (hereafter the supply agreement) would also require serious consideration, in view of the submissions advanced on behalf of the appellants by Mr. A. K. Mitra, learned senior counsel.
13. A brief reference to the facts preceding issuance of the communications impugned in the writ petition, as a prelude to our discussion, would not be inapt.
14. Capricorn, a consumer of electricity supplied by the appellants, ran into rough weather. At the relevant time, it operated a plant for manufacture of M.S. Billet with 2 x 8 Mt Induction Furnace and enjoyed high tension supply of electricity by the appellants. By an order of the Company Court, Capricorn went into liquidation. At or about the same time, proceedings were initiated against Capricorn by State Bank of India under the SARFAESI Act, 2002 for recovery of its dues. Participating in an e-auction sale conducted by such bank on August 14, 2018, the writ petitioner turned out to be the highest bidder and compliance by it of all formalities led to transfer by sale of the land and structures including factory, plant and machineries of Capricorn to the writ petitioner, with the sale certificate being registered on February 5, 2019. The Official Liquidator had represented Capricorn at the time of such sale. In due course of time, possession was handed over to the writ petitioner. On October 4, 2018, the writ petitioner sought for a new electric connection with details of power requirement as mentioned in its application addressed to the appellant no.2. It is the admitted case of the writ petitioner that the factory of Capricorn was closed for nearly two years and supply lying disconnected when the writ petitioner took possession of the same, and that it purchased the factory with a view to make it operational and manufacture M.S. Billet therefrom. Since the appellants did not respond positively to the request of the writ petitioner for a new connection at the factory premises, a writ petition was presented before this Court. A learned Judge disposed of the writ petition by an order dated April 17, 2019 directing expeditious consideration of the application for new connection. It was, however, placed on record that the issue as to whether the appellants could claim the dues of the previous owner of the factory from the writ petitioner was not addressed. The appellant no.3 thereafter issued a communication dated May 10, 2019 seeking to convey to the writ petitioner that power supply to Capricorn had been disconnected "due to non-payment of power dues" of Rs.22,05,27,519.00. Since the appellants had not received such dues of Capricorn, the writ petitioner was advised to arrange for liquidation of the same "so that power supply can be extended to the subject mentioned premises in accordance with prevailing law/regulation". Responding to a notice of contempt issued by the writ petitioner, the appellant no.3 issued a further communication dated May 17, 2019. After quoting the operative part of the order dated April 17, 2019 noticed above, it was observed that "the Hon'ble High Court quite prudently did not address the issue regarding the unpaid and/or unrealized dues of the previous owner of the factory". This was followed by the same advice as reflected in the earlier communication dated May 10, 2019, meaning thereby a reiteration of the demand to clear the outstanding dues of Capricorn.
15. Challenging these two communications, the writ petitioner once again invoked the writ jurisdiction of this Court seeking, inter alia, the following relief:
"(a) A writ in the nature of Mandamus commanding the respondents to act and proceed strictly in accordance with law and forbear themselves from giving any effect and/or further effect to the letter No. Coml./ PS/ SRRPL/ Durgapur/1845 dated 10.05.2019 and letter No. Coml./PS/ SRRPL/ Durgapur/1845 dated 17.05.2019 both issued by the respondent no.3 and directing the said respondents to forthwith rescind and/or re-call and/or withdraw the said letters and also to forthwith give high tension supply of electricity to the said factory premises as per requisition of the petitioner without insisting for payment of any alleged dues of the previous owner of the said factory premises i.e. M/s Capricorn Ispat Udyog Pvt. Ltd by the petitioner under any circumstances;"
16. The writ petition was moved on notice to the appellants. A reading of the order of disposal of the writ petition does not reveal any prayer being made on behalf of the appellants seeking opportunity to file counter affidavit to the writ petition. Upon hearing the parties, His Lordship decided the writ petition on the first day the same was moved upon consideration of the 2013 Regulations, to the extent relevant, and the decisions of the Supreme Court referred to above as well as that in Central Bank of India vs. State of Kerala, reported in (2009) 4 SCC 94.
17. To resist the claim of the writ petitioner before His Lordship, learned advocate for the appellants first relied on sub-reg. 3.4.2 of the 2013 Regulations. The learned Judge held that the appellants had failed to prove any nexus between Capricorn and the writ petitioner and hence, sub-reg. 3.4.2 would have no application. Next, the learned advocate relied on reg. 4.6.4. Reading such provisions, His Lordship returned the following finding:
"Now coming to Regulation 4.6, a plain reading of the aforesaid would essentially mean and apply to the same consumer applying for a fresh service connection after the deemed termination occurs as a consequence of expiry of 180 days after non-payment of dues by the said same consumer.
The said regulation can have no manner of application to the present case as the writ petitioner is a completely new consumer. He was in no way connected with either the earlier consumer or the earlier business of the consumer."
Based thereon, the writ petitioner was held entitled to the relief that was ultimately granted by His Lordship.
18. Although it was made clear to the parties that the appeal itself would be heard as a pure question of law had emerged, the Court was of the opinion while such hearing was in progress that the appellants ought to provide information on the following points and it was accordingly so ordered on January 2, 2020:
(1) the breakup of Rs.22,05,27,519.00 into principal, interest and DPS;
(2) whether the bank guarantee provided by Capricorn towards security was invoked or not; and (3) the steps taken by the appellants for recovery of the outstanding dues of Capricorn.
In compliance with such order, a bunch of documents was made over to the Court by the appellants. The same was taken on record.
19. Bare reading of such documents made startling revelations.
20. The bank guarantee furnished by Capricorn towards security expired on June 4, 2014. Despite Capricorn holding out assurances that fresh bank guarantee would be furnished towards security, which ultimately did not fructify, the appellants appear to have taken a very soft stance against Capricorn. Time and again, supply of electricity to Capricorn, was disconnected and on its prayer resumed with nil without security. Although there is correspondence to the effect that the appellants claimed the outstanding dues and Capricorn made payment of only a part thereof, there was no real effort on the part of the appellants to secure their own interest. Such negligence and recklessness on the part of the appellants led to accumulation of not only the dues but also DPS, so much so that Rs.22,05,27,519.00, comprising Rs.12,95,42,970 and Rs.9,09,84,549 towards outstanding dues and DPS, respectively, remained unpaid by Capricorn as on January 9, 2019. By the end of the last year, the quantum of DPS had increased to Rs.12,17,18,290.00. Supply of electricity to Capricorn was, however, finally disconnected on September 21, 2016.
21. Mr. A.K. Mitra for the appellants raised several contentions to persuade the Court interfere with the judgment and order under challenge.
22. The 2013 Regulations, to the extent the same are relevant, were placed to buttress the contention that the appellants are duly empowered by sub-reg. 4.6.4 to require the writ petitioner to liquidate the dues of Capricorn. According to him, on the date of e-auction, i.e., August 14, 2018, supply of electricity to the factory premises of Capricorn stood disconnected continuously for nearly 23 months and, therefore, in terms of sub-reg. 4.6.1, on expiry of 180 days of disconnection there was deemed termination of the supply agreement that the appellants had entered into with Capricorn. In that view of the matter, it was contended that the appellants had rightly invoked sub-reg. 4.6.4.
23. Referring to sub-reg. 3.4.2 and sub-reg. 4.6.4, Mr. A.K. Mitra contended that they operate in different fields. The former would make a licensee eligible to recover the dues of the previous and defaulting consumer from the new and subsequent consumer if a nexus between the two were established, the onus being on the licensee to prove the nexus, and such a provision could be taken recourse to even after supply of electricity through a new connection commences. However, the non-obstante clause in sub-reg. 4.6.4 empowers the licensee, in a case where deemed termination of agreement has been occasioned in terms of sub-reg. 4.6.1 or sub-reg. 4.6.3, as the case may be, to claim liquidation of the dues left behind by the deemed terminated consumer. Attention of the Court was drawn to the fact that sub-reg. 3.4.2 was part of the West Bengal Electricity Regulatory Commission Regulations, 2007 (hereafter the 2007 Regulations), whereas a clause similar to sub-reg. 4.6.4 of the 2013 Regulations was not part of the 2007 Regulations. The 2013 Regulations having repealed the 2007 Regulations, the effect of insertion of a provision like sub-reg. 4.6.4 ought to be considered in the perspective of the intention of the framers of the 2013 Regulations to empower a licensee to recover charges for electricity supplied to a deemed terminated consumer from an intending consumer of electricity in respect of the same premises, without being under any obligation to prove nexus, thus ensuring that the licensee is not left high and dry.
24. The interpretation of sub-reg. 4.6.4 of the 2013 Regulations by the learned Judge for holding it to be inapplicable to the writ petitioner, extracted supra, was assailed by Mr. A.K. Mitra by submitting that such an interpretation is ex facie irrational, unreasonable and incorrect. It was contended that sub-reg. 4.6.4 uses the expression "any consumer" and hence, there was no valid reason for limiting the regulation to application for fresh connection made by the 'same consumer', who had allowed disconnection by reason of non-payment of electricity bills. Sub- sections (1) and (2) of section 56 of the new Act were referred to, providing that the defaulting consumer cannot obtain restoration without clearing the arrears, and it was contended that the interpretation of sub-reg. 4.6.4, as placed by His Lordship, would render section 56 redundant and superfluous.
25. Further, Mr. A. K. Mitra urged that the writ petitioner having intended to have a new connection through the existing installations lying at the factory premises and it being neither a case of transfer of electric connection nor a case of fresh connection, sub-reg. 4.6.4 of the 2013 Regulations was clearly applicable in the instant case.
26. The Court also heard Mr. A.K. Mitra submit that even if the statutory regulations do not apply, the terms and conditions of the agreement for supply (which were not part of the proceedings before the writ court and intended to be brought on record by filing a supplementary affidavit) would reveal that the writ petitioner would be liable to clear the arrears of electricity dues left behind by Capricorn.
27. Mr. A.K. Mitra concluded by submitting that the learned Judge misread and misinterpreted the relevant statutory provision [sub-reg. 4.6.4] and granted relief to the writ petitioner illegally.
28. It is available from the orders passed on the appeal that Mr. A.K. Mitra intended to file a supplementary affidavit containing copy of the supply agreement but was greeted with a refusal at the Court's end since, at that stage, such affidavit was not considered necessary. However, Mr J.K. Mitra, learned senior counsel for the writ petitioner sought to rely on the supply agreement, enclosed to the said affidavit, advance copy whereof had been supplied to his advocate-on-record. Since both parties sought to place reliance on the same affidavit, the Court granted leave to the appellants to file such affidavit and the parties were subsequently allowed to refer to and rely on its contents.
29. Appearing on behalf of the writ petitioner, Mr J.K. Mitra invited our attention to section 43 of the new Act [which mandates every distribution licensee to supply electricity, on an application by an owner/occupier of a premises to such premises, within one (1) month after receipt of the application requiring such supply], and contended that such provision has been observed in the breach by the appellants. Thereafter, he took us through the entirety of reg. 3 and reg. 4 of the 2013 Regulations to demonstrate the two distinctive areas of its operation. Referring to sub-reg. 3.4.2, he contended that the same provides for a condition precedent in the sense that the right of the licensee to recover outstanding dues of the previous/defaulting consumer from a new and subsequent consumer (for the same premises) can be exercised if nexus is proved between the two, the onus to establish such nexus lying on the licensee. According to him, the appellants have admitted in paragraph 29, at page 14 of the stay application, that there is no nexus between the writ petitioner and Capricorn; therefore, in this case, admittedly, the condition precedent had not been established by the appellants and thus, their outstanding dues cannot be recovered from the writ petitioner invoking sub-reg. 3.4.2.
30. It was next contended by Mr. J.K. Mitra that electricity charges do not run with the land; hence it cannot be a charge on the property. Inviting our attention to the communication dated May 10, 2019 received from the appellants in response to the request dated October 4, 2018, he further contended that termination of agreement with Capricorn was not pleaded and thus, sub-reg. 4.6.4 was not intended to be invoked. Such regulation, according to him, comes into operation only when there is a deemed termination of the agreement (as per sub-reg. 4.6.1 or sub-reg. 4.6.3), but if there has been no deemed termination, there is absolutely no scope for invocation of sub-reg. 4.6.4.
31. The Court's notice was drawn to a page of the summary sheet filed by the appellants outlining "Chronological Events of Capricorn", and it was shown by Mr. J.K. Mitra that after initial disconnection of supply of electricity to Capricorn effected on November 6, 2014 for non-payment of dues, supply was resumed on condition of payment by instalments but owing to failure to make payment of the first instalment, supply was again disconnected on November 29, 2014. Thereafter, there were 4 (four) incidents of reconnection of supply effected on June 18, 2015, February 23, 2016, March 4, 2016 and August, 2016 and disconnection on January 19, 2016, March 2, 2016, May 5, 2016 and on September 21, 2016. The state of disconnection thereafter has continued till date. It would, therefore, seem to be clear that the appellants had resumed supply in favour of Capricorn after disconnection, on occasions more than one, thereby waiving the deemed termination and had made actual termination of the said agreement; thus, sub-reg. 4.6.4 was also not available for invocation by the appellant no.1 on this score.
32. Mr. J.K. Mitra would seek to remind the Court that the legislative intent is to protect a new and subsequent consumer against the right of the licensee to recover the dues of an erstwhile and defaulting consumer, unless a nexus between the previous and the new consumer were established by the licensee, and not otherwise; if the intention of the legislature was that by a non-obstante clause sub-reg. 4.6.4 would supersede sub-reg. 3.4.2, then sub-reg. 3.4.2 would never have been retained. The two clauses, it was reiterated, operated in different fields and if the premises are purchased by an auction purchaser and the licensee has not managed to establish the nexus as discussed aforesaid, he urged that sub-reg. 4.6.4 cannot be invoked.
33. Referring to the notification dated August 7, 2013 introducing the 2013 Regulations in supersession of the erstwhile notification dated September 12, 2007 (the 2007 Regulations), which retained sub-reg. 3.4.2 in spite of the addition of sub-reg. 4.6.4 with a non-obstante clause, Mr. J.K. Mitra urged that it is trite law that when any section containing a non-obstante clause does not refer to any particular provision which it intends to override but refers to the provisions of the statute generally, it is not permissible to hold that it excludes the whole enactment and stands alone all by itself. A search has to be made with a view to determining which provision answers the description and which does not. Reliance was placed in this regard on the decision in A. G. Varadarajalu v. State of Tamil Nadu, reported in (1998) 4 SCC 231. For the proposition that a non-obstante clause must be given effect to, to the extent of Parliament's intention and not beyond the same, the decision in ICICI Bank Ltd. v. SIDCO Leathers Ltd., reported in (2006) 10 SCC 452 was referred to.
34. Mr. J.K. Mitra further highlighted the definition of the term "consumer" as in section 2(15) of the new Act to buttress the point that the writ petitioner is not a consumer within the meaning of section 2(15) of the new Act, a fortiori, sub-reg. 4.6.4 of the 2013 Regulations. According to him, definition of "consumer" in the new Act has not radically changed with time and "consumer" as defined in the old Act and the new Act remains almost the same with minor changes. The changed scenario notwithstanding, i.e., the introduction of the new Act and rules/regulations framed thereunder, it was argued that the appellants have been wrong in their interpretation of the statutory provisions and treating the writ petitioner as a consumer.
35. Also, Mr. J.K. Mitra contended that the effect of sub-reg. 4.6.4 is to prevent a consumer whose power supply agreement with the licensee is deemed to have been terminated, or any permitted transferee, from obtaining a new service connection at the same premises without first making payment of the outstanding dues of the deemed terminated consumer. It has been his submission that by such method, a dishonest consumer or a transferee could be prevented from obtaining fresh electric connection at the same premises upon disconnection of the existing electric supply for non-payment of dues; however, this principle does not apply to anyone like the writ petitioner seeking a new connection without having any nexus with the defaulting consumer. This, according to him, is the only way that sub-reg. 4.6.4 can be read in conformity with sub-reg. 3.4.2.
36. The above submission was sought to be buttressed by inviting our attention to the said agreement, more particularly the recital indicating that Capricorn, as a 'consumer', shall include its 'successors or permitted assignees', and clauses 22 and 23 thereof. What has been urged is that on a conjoint reading of the provisions of the 2013 Regulations and the supply agreement, it is apparent that the liability for payment of outstanding dues against the deemed terminated consumer in terms of sub-reg. 4.6.4 can be foisted on a permitted licensee, who is inducted into the premises and becomes a new consumer with the permission of the appellant no.1 and who intends to retain the power supply from the appellant no.1, and that such reading of sub-reg. 4.6.4 would not militate against the provision of sub-reg. 3.4.2.
37. Having regard to the disconnection effected on November 29, 2014 and resumption of power supply on June 18, 2015, Mr. J.K. Mitra finally contended that admittedly, the power supply had been disconnected for a continuous period of over 180 (one hundred eighty) days which should have resulted in deemed termination of the supply agreement between the appellants and Capricorn. From pages 2-4 of the compilation submitted by the appellants, it has also been shown that DPS has been charged by the appellants up till December, 2019; had the agreement been deemed to be terminated, he submitted that DPS could not have been levied further up till December, 2019.
38. While concluding, Mr. J.K. Mitra contended that based on the arguments advanced before this Court by the parties and the revelations made in course of hearing of the appeal, the order allowing the writ petition ought to be sustained.
39. In reply, Mr. A.K. Mitra argued that whether or not the writ petitioner is a "consumer" within the meaning of section 2(15) of the new Act is a mixed question of fact and law. According to him, the provision in two parts has also an inclusive part and such part clearly involves a question of fact. It was neither pleaded in the writ petition nor argued before the learned Judge that the writ petitioner is not a "consumer" within the definition of section 2(15) of the new Act. There was also no pleading that the premises of Capricorn was not connected with the "works" of the appellant no.1 for the purpose of receiving supply of electricity or that there was no "works" of the appellant no.1 at such premises. This argument of the writ petitioner that it is not a "consumer" cannot be made without amending the writ petition.
40. Without prejudice to the above, Mr. A.K. Mitra further argued that such a contention is not acceptable even on merits. On the basis of the averments made in the writ petition itself, the writ petitioner as purchaser of the property of Capricorn would clearly fall within the inclusive definition of "consumer". It has been admitted in the writ petition that upon purchase, the writ petitioner became the owner and was in occupation of the factory premises when it applied for electric connection. It is also an admitted case that there are existing installations of the appellant no.1 at the factory premises through which electrical energy could be supplied and the writ petitioner approached the appellant no.1 for supply of electricity through the existing installations. Therefore, it should be held that the writ petitioner has been a "consumer" within the inclusive part of section 2(15) of the new Act.
41. Mr. A.K. Mitra next referred to section 20 of the DVC Act to contend that the same empowers the appellant no.1 to fix the schedule of charges for the supply of electrical energy and specify the manner of recovery of such charges. Our attention was drawn, in this connection, to the supply agreement which provided, inter alia, in clauses 22 and 23 as follows:
"22.*** If any consumer is willing to sell its property to another person who intends to retain the power supply from the Corporation the existing consumer/new owner has to clear all its dues against power supply bills, if any and the new owner will be deemed as new consumer and shall complete all the formalities including signing of PPA. It is to be noted that point of power supply to a consumer is for use in a specific property area as declared by the consumer and claim for outstanding dues on that property will debar new owner's electricity connection by DVC till all outstanding dues on old consumer for supply in that property is cleared either by old consumer or new owner.
23. If the power supply to any Consumer remains disconnected continuously for a period of 180 (one hundred and eighty) days where the disconnection has been effected in compliance with any of the provisions of Electricity Act, 2003 and clauses of this Agreement, the Agreement with the Consumer for the supply of electricity shall be deemed to have been terminated with consequential effect on expiry of the said period of 180 (one hundred and eighty) days. This will be without prejudice to such other action or the claim that may arise from the disconnection of supply or related issues therefor. On termination of the Agreement, the Corporation shall have the right to remove the service line and other installations through which electricity is supplied to the Consumer."
42. Responding to our query as to whether the appellant no.1 still has the power to fix the schedule of charges for supply of electricity by it to its consumers upon such power being conferred on the Central Electricity Regulatory Commission (hereafter the CERC) by the new Act and whether clauses 22 and 23 of the supply agreement can be said to have statutory force, Mr. A.K. Mitra's submission was that (i) only the power to fix tariff under section 20 of the DVC Act has been held to be inconsistent with the provisions of the new Act by an Appellate Tribunal, whose decision has been upheld by the Supreme Court in its decision in Bhaskar Shrachi Alloys Limited v. Damodar Valley Corporation, reported in (2018) 8 SCC 281 but the other statutory powers which the appellant no.1 has been statutorily conferred by the new Act have not been held to be inconsistent; and (ii) the appellants, by reason of statutory provisions as well as the said agreement, were justified in demanding that the writ petitioner clears the arrear dues of Capricorn prior to supply of electricity to the premises, there being no waiver of reg. 4.6 by the appellants.
43. Mr. A.K. Mitra thus renewed his prayer for interference in exercise of this Court's appellate powers.
44. The parties having been heard in full, they sought for leave to file written notes of arguments. Such leave was granted and the written notes are part of the record.
45. At the outset, it ought to be placed on record that I have a blank canvas for painting my views. I have no hesitation in recording that none of the statutory provisions referred to above, i.e., the 2013 Regulations and the DVC Act together with the new Act, emerged for consideration in any of the cited decisions. A decision being an authority for what it decides and not what logically follows therefrom, I shall on my journey bear in mind as much of the statement of law laid down by the Supreme Court which is binding on this Court under Article 141 of the Constitution and apply the relevant law to resolve the controversy.
46. It is considered appropriate to begin by noticing the effect of the new Act on the provisions of the DVC Act, as well as whether the supply agreement could permit the appellants to raise the impugned demand for clearance by the writ petitioner for having a new connection.
47. The new Act, repealing the old Act, came into force from June 10, 2003. The CERC and the State Electricity Regulatory Commissions established under the Electricity Regulatory Commissions Act, 1998 (hereafter the 1998 Act) were given the status of bodies corporate and entrusted to carry out the purposes of the new Act.
48. Sub-section (1) of section 82 of the new Act empowers each State Government to constitute for the purposes of the Act a Commission for the State titled (the name of the State) Electricity Regulatory Commission within six months from the appointed date, by notification. In terms of sanction provided by the 1998 Act, the West Bengal Electricity Regulatory Commission (hereafter the WBERC) had been constituted by the State Government and, therefore, in terms of the first proviso to sub-section (1) of section 82, the WBERC continues to be the State Commission for the State of West Bengal.
49. Section 86 of the new Act provides what the functions of a State Commission would be. Clause (a) of sub-section (1) of the said section empowers the Commission to determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State.
50. Power is conferred by section 181 of the new Act on the State Commissions to make regulations. In terms of clauses (x) and (zh) of sub-section (2) of section 181, provision has been made for framing of regulations by the State Commissions in respect of electricity supply code under section 50 and issue of tariff with modifications or conditions under sub-section (3) of section 64, respectively.
51. Section 50 of the new Act, providing for "an electricity supply code", reads as follows:
"50. The Electricity Supply Code.--The State Commission shall specify an Electricity Supply Code to provide for recovery of electricity charges, intervals for billing of electricity charges, disconnection of supply of electricity for non-payment thereof, restoration of supply of electricity, measures for preventing tampering, distress or damage to electrical plant or electrical line or meter, entry of distribution licensee or any person acting on his behalf for disconnecting supply and removing the matter, entry for replacing, altering or maintaining electric lines or electrical plants or meter and such other matters."
(emphasis supplied)
52. In terms of power conferred by section 50 read with clause (x) of sub-section (2) of section 181 of the new Act, the WBERC has framed the 2013 Regulations. The relevant provisions thereof shall be considered a little later while deciding the crux of the controversy.
53. Turning attention to the aspect of tariff, the procedure for tariff order by the 'Appropriate Commission' is traceable to section 64 of the new Act. Section 2(4) defines 'Appropriate Commission' which includes a State Commission referred to in section 82.
54. The WBERC, on the authority of power conferred by section 64 read with clause (zh) of sub-section (2) of section 181, has framed the West Bengal Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2011.
55. It would, therefore, seem to be clear that upon the new Act becoming enforceable, a duty was thrust on the State Commissions to fix the tariff and to provide for, inter alia, recovery of charges for supply of electricity through the 'Electricity Supply Code'. So far as West Bengal is concerned, the WBERC has duly discharged the duty by framing appropriate regulations which, inter alia, bind the appellant no.1.
56. Insofar as the appellant no.1 is concerned, notice is required to be taken of what the new Act says about it. Grant of licence to any person to transmit, distribute and undertake trading in electricity is provided for by section 14 of the new Act. The fourth proviso to section 14 reads as follows:
"Provided also that the Damodar Valley Corporation, established under sub- section (1) of Section 3 of the Damodar Valley Corporation Act, 1948, shall be deemed to be a licensee under this Act but shall not be required to obtain a licence under this Act and the provisions of the Damodar Valley Corporation Act, 1948, insofar as they are not inconsistent with the provisions of this Act, shall continue to apply to that Corporation (14 of 1948):"
57. The appellant no.1 came into existence as a creature of the DVC Act, which was enacted for the establishment and regulation of a Corporation for the development of the provinces of West Bengal and Bihar (now Jharkhand). One of the functions of the appellant no.1, as laid down in section 12(b) of the DVC Act, is "the promotion and operation of schemes for the generation, transmission and distribution of electrical energy, both hydro-electric and thermal".
58. Section 20 of the DVC Act, on which Mr. A.K. Mitra has heavily relied, reads as follows:
"The Corporation shall fix the schedule of charges for the supply of electrical energy, including the rates for bulk supply and retail distribution, and specify the manner of recovery of such charges:
Provided that the Corporation may in any contract for bulk supply of electrical energy impose such terms and conditions including a retail rate schedule as it may deem necessary or desirable to encourage the use of electrical energy."
59. Though power had been conferred by section 20 of the DVC Act on the Corporation to fix charges and to specify the manner of recovery of such charges, such provision has to yield to the provisions of the new Act and the relevant regulations framed thereunder by the WBERC and having regard to the fourth proviso to section 14 of the new Act, section 20 of the DVC Act to the extent of its inconsistency with the new Act and the regulations framed thereunder, would be inoperative in the State of West Bengal.
60. Also, the contention of Mr. A.K. Mitra that notwithstanding what is provided for in the 2013 Regulations the Corporation can still enforce the terms of the supply agreement against the writ petitioner appears to be in the teeth of section 50 of the new Act read with the 2013 Regulations specifying the Electricity Supply Code and, inter alia, making provision for recovery of charges. In my further view, apart from sub-reg. 3.4.2 and sub-reg. 4.6.4, there is no provision in the new Act which would authorise the appellants' action of demanding payment from an auction purchaser like the writ petitioner. Surely, the appellants having no option but to fall back on either sub-reg. 3.4.2 or sub-reg. 4.6.4 of the 2013 Regulations, cannot base their claim against the writ petitioner on the supply agreement. The contention that the terms thereof could be enforced against the writ petitioner for recovery of the dues left behind by Capricorn is misconceived.
61. In any event, the terms of the agreement for supply to which attention has been drawn by Mr. J.K. Mitra coupled with inter vivos transfer of the factory premises of Capricorn in favour of the writ petitioner pursuant to proceedings under the SARFAESI Act leaves no doubt that such terms are certainly not binding on the writ petitioner and do not give a legitimate cause to the appellants to insist that as a pre-condition for new connection, the writ petitioner has to clear the dues on account of electricity charges left behind by Capricorn.
62. The contention advanced by Mr. A.K. Mitra relying on the supply agreement, accordingly, stands overruled.
63. What is the effect of the non-obstante clause in sub-reg. 4.6.4 may now be considered in the light of judicial authorities on the topic. Mr. J.K. Mitra has relied heavily upon a particular passage in A.G. Varadarajulu (supra) Paragraph 16 notices two authorities and succinctly summarises the position thus:
"It is well settled that while dealing with a non obstante clause under which the legislature wants to give overriding effect to a section, the court must try to find out the extent to which the legislature had intended to give one provision overriding effect over another provision. Such intention of the legislature in this behalf is to be gathered from the enacting part of the section. In Aswini Kumar Ghose v. Arabinda Bose, AIR 1952 SC 369, Patanjali Sastri, J. observed:
'The enacting part of a statute must, where it is clear, be taken to control the non obstante clause where both cannot be read harmoniously;' In Madhav Rao Scindia v. Union of India, (1971) 1 SCC 85 (SCC at p. 139) Hidayatullah, C.J. observed that the non obstante clause is no doubt a very potent clause intended to exclude every consideration arising from other provisions of the same statute or other statute but 'for that reason alone we must determine the scope' of that provision strictly. When the section containing the said clause does not refer to any particular provisions which it intends to override but refers to the provisions of the statute generally, it is not permissible to hold that it excludes the whole Act and stands all alone by itself. 'A search has, therefore, to be made with a view to determining which provision answers the description and which does not'."
64. The above dicta were rendered in Madhav Rao Scindia (supra) in the peculiar circumstance of a majority judgment of the Hon'ble Supreme Court holding the act of the executive of abolition of privy purse and "de-recognizing" the Rulers entitled to it, to be unconstitutional. While doing so, the Bench had to consider the effect of Article 363 of the Constitution of India excluding the jurisdiction of any court including the Supreme Court in respect of the matters mentioned therein, on Article 32 of the said Constitution which was not limited. When the Constitution granted a power under one Article and restricted that power under another Article, what would be the effect, was the question raised. It was expressly mentioned in that judgment constitutional rights were political constructs based on the historical and political circumstances and that even though the right to get any payment by way of the privy purse was initially by way of a contract between high contracting parties, once it was recognized by the Constitution of India, it became a constitutional right. Therefore, once a right was recognized as Constitutional, its violation as against a citizen would give rise to a right under Article 32 of the Constitution of India, if it touched any fundamental right. For that reason, the dictum quoted above was given in Madhav Rao Scindia (supra) not to restrict the jurisdiction of Article 32, but to actually enlarge it, and limit Article 363. I therefore understand the said dictum to mean that once a non-obstante clause is used, it must be given effect to and allowed to operate, so long as each of the conditions for it to operate are fulfilled and shown to have been fulfilled. Bearing in mind the aforesaid, let me focus on sub-reg. 4.6.4 vis-à-vis Mr. J.K. Mitra's contention that the writ petitioner is not a "consumer" within the meaning of section 2(15) of the new Act and Mr. A.K. Mitra's argument that the writ petitioner is covered by the inclusive part of the definition of "consumer". The scope of sub-reg. 4.6.4 has to be determined strictly based on the nature of the search as outlined in the authority noticed above.
65. Sub-reg. 4.6.4 is also the sheet anchor of Mr. A.K. Mitra's contention to resist the writ petitioner's claim; hence, it would be profitable to read it along with the other sub-clauses preceding it. Reg. 4.6 reads as under:
"4.6 Deemed termination of agreement 4.6.1. if the power supply to any consumer remains disconnected for a period of one hundred and eighty days where the disconnection has been effected in compliance with any of the provisions of the Act and Regulations, the agreement of the licensee with the consumer for supply of electricity shall be deemed to have been terminated with consequential effect on expiry of the said period of one hundred and eighty days. This will be without prejudice to such other action or the claim that may arise from the disconnection of supply or related issued therefor. On termination agreement, the licensee shall have the right to remove the service line and other installations through which electricity is supplied to the consumer. 4.6.2. The licensee shall take appropriate action against the consumer or consumer-in-default in terms of the provisions of the Act, Rules and Regulations apart from any other remedy provided in any other law for the time being in force.
4.6.3. If in any occasion during the period of 180 days as mentioned in 4.6.1. the security deposit becomes inadequate then the agreement for supply of electricity shall be deemed to have been terminated instantly and outstanding dues shall be realized by way of invocation of the security amount.
4.6.4. Notwithstanding anything contained contrary elsewhere in these Regulations were (sic, where) deemed termination of agreement has taken place, then on the basis of application for any consumer new service connection can only be provided in the same premises if the outstanding dues against the deemed terminated consumer is cleared along with the late payment surcharge."
66. It has been noticed above that by its letter dated October 4, 2018, a new connection was what the writ petitioner asked for and not a fresh connection.
67. The appellants by their letter dated May 10, 2018 responded to the letter of October 4, 2018. Relevant portion thereof reads as follows:
"*** Further, as per DVC's record the outstanding dues in respect of M/s. Capricorn ... whose power supply has been disconnected by DVC due to non-payment of power dues is Rs.22,05,27,519.00 (including DPS) (approx.).
It may please be noted that DVC is yet to receive the outstanding dues. You are requested to please arrange for liquidation of the above dues so that power supply can be extended to the subject mentioned premises in accordance with prevailing law/regulation.
***".
68. The subsequent communication dated May 17, 2019 that followed from the end of the appellants contained a version more or less identical to that expressed in the communication dated May 10, 2018. There was no whisper of invocation of reg. 4.6 of the 2013 Regulations. Be that as it may.
69. The rival contentions have to be examined from the perspective of sub-reg. 4.6.4, being a non-obstante clause. In my view, the difficulty in embarking on an interpretative exercise could have been easily avoided had sub-reg. 4.6.4 been couched in terms such as "then on the basis of application of any person new service connection can only be provided if ...." instead of the text providing "then on the basis of application for any consumer new service connection can only be provided if ...." (underlining for emphasis). The former expression could have covered a wider area but since it is not open to add or subtract words from the statute, sub-reg. 4.6.4 has to be read as it is.
71. At this stage, it may not be out of context to read reg. 3.4.2 of the 2013 Regulations. It reads as follows:
"3.4.2. The licensee shall be eligible to recover from a new and subsequent consumer(s) the dues of the previous and defaulting consumers in respect of the same premises only if a nexus between the previous and defaulting consumer(s) and the new consumer(s) in respect of the same premises is proved. The onus of proving a nexus, if claimed by a licensee, shall lie on the licensee.
72. Perusal of reg. 3.4.2 reveals a conscious and clear classification of a "consumer"
into two classes for its operation, viz. (i) a new and subsequent consumer; and (ii) a previous and defaulting consumer. Such classification is more than sufficient to gather the legislative intent. The two classes despite being distinct, proof of nexus between the two would authorise a licensee to recover dues of a previous and defaulting consumer from the new and subsequent consumer.
73. Sub-reg. 4.6.4 of the 2013 Regulations reveals a reference to "deemed terminated consumer". By using all these terms in the 2013 Regulations, sort of a classification of a "consumer" has been brought about by the WBERC without, however, seeking to insert in reg. 2 of the 2013 Regulations, i.e., the definition clause, the specific meaning to be attributed to the word "consumer" wherever it is used in such regulations. What is provided in sub-reg. 2.2 of the 2013 Regulations is that any word or expression used but not defined in the 2013 Regulations shall have the meaning as assigned to it in the new Act. One has to necessarily fall back on section 2(15) thereof.
74. The key words in sub-reg. 4.6.4, to my mind, are: "then on the basis of application for any consumer new service connection can only be provided in the same premises if the outstanding dues against the deemed terminated consumer is cleared ...". Although the previous and defaulting consumer [as used in reg. 3.4.2] and the deemed terminated consumer [as used in reg. 4.6.4] could be the same person, the new and subsequent consumer [as used in reg. 3.4.2] and any consumer [as used in reg. 4.6.4] may not necessarily be the same person. Mr. A.K. Mitra has not shown us any provision that expressly or by implication debars the deemed terminated consumer from applying for new service connection altogether from the licensee in respect of the same premises before its accumulated dues are cleared by him. Therefore, the search has to be whether "any consumer" [as used in reg. 4.6.4] covers an auction purchaser like the writ petitioner.
75. Section 2(15), defining "consumer", is more or less similarly worded as section 2(c) of the old Act which defined "consumer". For facility of reference, both definitions are reproduced below:
"(c) 'consumer' means any person who is supplied with energy by a licensee or the Government or by any other person engaged in the business of supplying energy to the public under this Act or any other law for the time being in force, and includes any person whose premises are for the time being connected for the purpose of receiving energy with the works of a licensee, the Government or such other person, as the case may be;"
"(15) 'consumer' means any person who is supplied with electricity for his own use by a licensee or the Government or by any other person engaged in the business of supplying electricity to the public under this Act or any other law for the time being in force and includes any person whose premises are for the time being connected for the purpose of receiving electricity with the works of a licensee, the Government or such other person, as the case may be;"
76. The minor differences in the two definitions are that the words "for his own use"
in section 2(15) do not appear in section 2(c), and that the word "energy" at the beginning and towards the end of section 2(c) is replaced by the word "electricity"
in section 2(15).
77. While reading the definition of "consumer" in section 2(15), one finds reference to certain words which have been defined elsewhere in section 2 itself, viz., "person", "supply", "electricity", "licensee", "premises", and "works". Each of these words, as defined in section 2, has to be read to understand who a consumer is.
78. It is not considered necessary to burden this judgment by reproducing the definition of all such words. Suffice it to say, a conjoint reading of all these words makes the meaning of the word 'consumer' intelligible. Basically a "consumer" is a "person" and not any "premises" to which electricity might have been in supply or which is connected with the works of a licensee for receiving electricity. In terms of section 2(15) of the new Act read with section 2(49) thereof, a "consumer" could either be a natural or a juristic person with strings of the nature mentioned in it being attached. The definition consists of two parts: a restrictive first part and an inclusive second part. Section 2(15) can be dissected to define a "consumer" as (a) meaning any person who is supplied with electricity for his own use; and (b) including any person whose premises are for the time being connected for the purpose of receiving electricity with the works of a licensee. So, a person who is not being sold electricity contractually could still be treated or deemed to be a consumer if his premises "are for the time being connected for the purpose of receiving electricity with the works of a licensee".
79. The writ petitioner is obviously not a "consumer" covered by (a) supra. Is it a "consumer" covered by (b) supra? This question needs to be addressed immediately.
80. Answering the above question would involve ascertainment of the meaning of the word "connected", in the context where it has been used. 'Joined' or 'linked together' is the common meaning that one attributes to the word 'connected'. Therefore, in relation to electricity, the concerned premises ought to be, for the time being, joined or linked together with the works of a licensee for receiving electricity.
81. To my mind, "are for the time being connected" would seem to carry the meaning that the premises and the works of a licensee are so connected for the time being that the premises are in a position to receive electricity from the licensee. Viewed from this angle, the writ petitioner could be a "consumer" within the inclusive part of section 2(15) of the new Act if it can be proved to the satisfaction of the Court that the premises and the works are "connected".
82. Now, bearing in mind the contention of Mr. A.K. Mitra that there has been a deemed termination of the supply agreement due to power supply to Capricorn remaining disconnected continuously for a period of 180 (one hundred and eighty) days, I have looked into clauses 2(a), 5 and 20 of the supply agreement providing, inter alia, as follows:
"2(a). Unless otherwise agreed upon the point of supply shall be incoming terminals of the circuit breakers/isolators installed at the Consumer's premises for extending Corporation's supply to the Consumer. Corporation shall supply electrical energy to the Consumer at the above mentioned point of supply provided that - ***
5. The point of supply shall be at the incoming terminals of the switchgear and meters provided at Consumer's end from which the energy is conveyed to the Consumer.
***
20. In the event of any bill mentioned in the aforesaid Clause-18 & 19 along with the sub-clause remaining unpaid within due date (30 days from the date of issue of the bill), the Corporation may disconnect or cut off supply of electricity to any defaulting Consumer who fails or neglects to pay the electricity charges and/or other charges as per the electricity bill, ...".
(emphasis supplied)
83. Having regard to the aforesaid clauses, i.e., 2(a), 5 and 20 of the supply agreement, it stands to reason that disconnection/cutting off of supply to Capricorn must have occurred at any point prior to or at the point of supply. Disconnection effected due to non-payment of dues in terms of the supply agreement by Capricorn and such disconnection, continuing for more than 180 (one hundred eighty) days, constitute the jurisdictional facts for a deemed termination of such agreement. That an existing state of disconnection has been continuing since September, 2016, is not in doubt.
84. It is perfectly possible for any particular premises to have a discontinued supply of electricity, but with the incoming terminals of the circuit breakers/isolators still existing at the said premises. In such case, the premises would continue to be 'connected' for the purpose of Section 2(15) of the Electricity Act, 2003. I have asked myself, whether it would have made a difference if instead of the word "connected" being used in Section 2(15) of the new Act, the word 'disconnected' were used? In such case, the task would have been simpler because once supply to the factory premises of Capricorn was disconnected owing to its failure to clear the outstanding dues of the appellant no.1 and such disconnection, as contended, has continued for more than 180 (one hundred eighty) days leading to deemed termination of the agreement for supply entered into by and between the appellant no.1 and Capricorn, meaning thereby that the state of disconnection is prevailing since September 2016, in my view, undoubtedly the writ petitioner could have qualified to be a "consumer" within the meaning of section 2(15) of the new Act because the premises it purchased in the auction is for the time being disconnected for the purpose of receiving electricity from the appellants. I would not have to go on a fact-finding exercise as to whether the terminals of the circuit breakers/isolators were still retained at the said premises, to find out if the factory premises were "connected". It would have been a pure question of law instead of a mixed question of law and facts, for the non-obstante clause to operate. However, 'disconnected' is not what the legislature has used but it has used 'connected'. Connected and disconnected being opposites, cannot co-exist and be read interchangeably. So, I hold that whether or not the premises are "connected" after disconnection, regardless of whether the disconnection has continued for 180 (one hundred eigfhty) days or more, is a question of fact, to be ascertained by finding out whether the terminals of the circuit breakers/isolators are still present at the said premises. The language employed being of vital importance, I am disinclined to agree with Mr. A.K. Mitra that the writ petitioner is covered by the definition of the word "consumer" before the jurisdictional fact as to whether terminals as aforesaid are still retained at the said premises or removed by the appellants has been established.
85. That apart, the phrase "for the time being" cannot also be excluded from consideration. As observed above, a person even though not being supplied with electricity in the sense that electricity is not being sold to him contractually, could still be treated to be or deemed to be a consumer if such person's premises "are for the time being connected" for the purpose of receiving electricity with the works of the licensee. The word "connected" preceded by the phrase "are for the time being" appears to be of great significance while comprehending who would qualify to be a consumer within the meaning of section 2(15) of the new Act. The phrase 'for the time being', is the English equivalent of the Latin term "pro tempore" meaning temporary. Although the phrase "for the time being in force" is found in the first part of the definition and "for the time being" in the second part, the two in the context the same are used do not bear the same meaning. In the context, the plain meaning of "are for the time being connected" would mean something present "at the moment" and not on a previous date/too long ago. Such a view is formed on the basis of the decision of the Supreme Court in Jivendra Nath Kaul v. Collector/District Magistrate, reported in (1992) 3 SCC
576. In a case where a disconnection has been effected by a licensee, say by cutting off supply [as used in section 56 of the new Act] and such disconnection has continued for more than 2 (two years), as is evident from the records, can it be inferred that for the time being the premises is connected with the works of the licensee for receiving electricity? Generally, the answer ought to be in the negative. However, a somewhat broader view could be taken, i.e., the phrase "for the time being connected", could be stretched to imply that whether or not a person is a "consumer" is a jurisdictional fact which is required to be established by he who claims it, by establishing that despite disconnection of supply of electricity to the premises of such a person, such premises continues to remain connected with the works of the licensee for receiving electricity at or about the time a question arises for consideration, which of course is a question of fact. Stress laid by Mr. A.K. Mitra on "any consumer" as encompassing a "new and subsequent consumer" does not commend to me to be acceptable for the reasons that "any", in my opinion, would take colour from any of the two parts of the definition of "consumer" appearing in section 2(15) of the new Act as well as keeping in mind absence of any definition in the 2013 Regulations enlarging the scope of a "consumer" and thereby taking within its fold a person who intends to become a consumer.
86. Since it is a question of fact as to whether the premises of the writ petitioner was so connected for receiving electricity, the materials on record need to be looked into for finding out the rival claims. Having perused the averments in the application for stay as well as the contents of the communications, which were impugned in the writ petition, it does not appear to be the definite case of the Corporation that the premises of the writ petitioner "are for the time being connected" with the works of the licensee for receiving electricity. There is in fact no such pleading. Reference made by Mr. A.K. Mitra to an averment in the writ petition that certain installations of the appellant no.1 are there in the factory premises, does not advance the cause of the appellants. It does not specify the nature of the installations: whether the circuit breakers are there or not, and/or whether the line for supply of electricity from the appellants is still present on the said premises or not. The word "connected" used in section 2(15) is required to be construed, since it does not refer to 'installations' but only that the premises are for the time being "connected". Even if "works of the licensee" were intended to include installations, that the premises continue to remain "connected" thereto has not been established. This is coupled with the undisputed fact that the writ petitioner was delivered possession of the factory premises of Capricorn post August, 2018, whereas actual disconnection of electricity to Capricorn was effected in September, 2016. In the interregnum, much water has flown down the river Damodar. The present position at the site of the factory premises is unknown and, thus, the test of "for the time being connected" is not fulfilled.
87. The legislative intent is clear that the person whose premises are for the time being connected would be a 'consumer'. Pertinently, mere presence of unspecified installations or unspecified works of a licensee at any particular premises would not make the owner/occupier of such premises a "consumer", unless the works and the premises are shown to be connected for the purpose of receiving electricity. In my view, to cover an auction purchaser like the writ petitioner within the term"consumer", the definition in section 2(15) is not quite wide enough to attract liability under sub-reg. 4.6.4.
88. Assuming that my above reading of the statutory provisions are constricted and that the inclusive part of the definition of "consumer" in section 2(15) has to be given a wider meaning, even then the scales would not tilt in favour of the appellants for the reason that follows.
89. I would now view the problem from a different perspective having regard to the expressions "connected" for the purpose of "receiving electricity" in section 2(15) of the new Act. The premises and the works of the licensee could, for the time being, be connected for receiving electricity although electricity, in fact, may not be in supply and thus not received by the owner of the premises; but in such a case, the licensee could, at any time, resume supply of electricity as and when the situation demands, not in the sense of supply as defined in section 2(70) of the new Act but supply in the literal sense, without doing anything more than switching on supply. It has, therefore, to be shown by a licensee that the premises of the person (could be the owner or an occupier) is, for the time being, "connected" with the licensee's electric system in the sense that if the licensee so chooses, it can supply electricity forthwith without undertaking any further/new work including any manual work for replacement of any cable/wire/equipment that had been laid earlier to connect its works with the premises or without embarking on any mechanical process, to resume supply.
90. Turning to the facts at hand, it was necessary for the appellants to build up a case that they are entitled in law to demand liquidation of the arrears left behind by Capricorn upon invocation of sub-reg. 4.6.4 of the 2013 Regulations. To ensure that, the minimum expected of them was to say with a degree of certainty and conviction that notwithstanding transfer of the secured asset pursuant to the sale effected by the secured creditor, the writ petitioner as purchaser answers the definition of a "consumer" and, therefore, liable in terms of sub-reg. 4.6.4. What I find on perusal of the records is a complete lack in this behalf. The appellants were not sure which provision of law was appropriate to be invoked and hence, maintained silence by not referring to it. I do not for a moment say that absence of reference to a statutory provision would invalidate an action, otherwise permissible in law. But what was required by the appellants, in order to invoke sub-reg. 4.6.4, was to at least refer to the 'fact' portion of the inclusive definition of "consumer", as Mr. A.K. Mitra contended, and say that the condition for treating the writ petitioner as a consumer under the new Act stood fulfilled and, therefore, it was liable to clear the dues of Capricorn. That not having been said, the jurisdictional fact for demanding payment by invocation of sub-reg. 4.6.4 remained non-existent.
91. The point taken by the appellants in their arguments in reply/written notes of arguments that it was for the writ petitioner to plead that it was not a "consumer", has not impressed me at all. Apart from the demand, the two communications impugned in the writ petition reflected nothing that the writ petitioner was seen to be a "consumer" within the meaning of section 2(15) of the new Act. The writ petitioner could not possibly have, by projecting its own imagination, discovered all the facts and circumstances that could be in the appellants' contemplation to be pressed/applied against it. Omission to plead in the writ petition that it is not a "consumer" is, thus, not fatal; to the contrary, omission of the appellants to at least hint in any of the two communications, and in the stay application as well, that the premises for the time being was "connected" with the works of the appellant no.1 for "receiving electricity", as noticed above, proves fatal for their interest.
92. I thus hold that the appellants have failed in their pursuit to prove that the writ petitioner is a "consumer" within the inclusive definition appearing in the second part of section 2(15) of the new Act.
93. This, to my mind, is sufficient to hold in favour of the writ petitioner and against the appellants. However, I do not wish to rest my conclusion only on this point.
94. Having regard to what has been held in paragraph 62 of Isha Marbles (supra) too, the writ petitioner is not a "consumer". In Isha Marbles (supra), no doubt section 2(c) of the old Act was under consideration but the wordings of section 2(15) of the new Act are not materially different from it. Once it has been held there upon consideration of section 2(c) of the old Act that an auction purchaser does not become a "consumer" upon purchasing a property to which electricity is disconnected till a contract is entered into, the same logic would apply here. The endeavour of Mr. A.K. Mitra to distinguish the decision by referring to Schedule VI of the old Act, which is not there in the new Act, has failed to impress me. Paragraph 62 of Isha Marbles (supra) makes the position clear that the statement of law was declared based on the definition of "consumer" as in section 2(c) of the old Act and not on consideration of Schedule VI.
95. So that there is no confusion, I reiterate, that it is my finding based on the aforesaid, that while it is possible for an auction purchaser to be brought within the ambit of sub-regulation 4.6.4 for the purpose of recovering the dues of an erstwhile consumer in respect of the supply of electricity to the said premises, the operation of the said non-obstante clause, if it is regardless of the existence of nexus between the erstwhile consumer and the auction purchaser, requires the distribution licensee to establish the jurisdictional facts that a) the premises concerned are connected, for the time being, with the works being the distribution mains of the distribution licensee (including all transmission lines, transformers, to be specified); b) for the purpose of receiving electricity; and c) in such manner that the supply of electricity can be resumed by simply putting on a switch. If it is established, on facts, then sub-egulation 4.6.4 will operate. If any one condition is not shown to be satisfied, then it will not operate. The latter circumstance appears to be that of the present case, and hence the appeal fails.
96. For all the reasons as above, the impugned judgment and order is affirmed. The appeal stands dismissed, without any order for costs.
97. The order of the learned Judge may now be complied with by the appellants as early as possible but not later than a month from receipt of an authenticated copy of this judgment and order.
(Dipankar Datta, J.) Protik Prakash Banerjee, J.:
I agree.
(Protik Prakash Banerjee, J.)