Kerala High Court
A. Ramachandran vs Kerala State Electricity Board And Ors. on 31 May, 2000
Equivalent citations: AIR2001KER51, AIR 2001 KERALA 51, ILR(KER) 2000 (3) KER 344, (2000) 2 KER LT 694, (2000) 4 RECCIVR 284, (2000) 4 CIVLJ 918
Author: K.S. Radhakrishnan
Bench: K.S. Radhakrishnan
JUDGMENT Radhakrishnan, J.
1. The question that has come up for consideration in this case is whether the Kerala State Electricity Board is bound to give reconnection or new connection under the Electricity (Supply) Act read with Regulations relating to Conditions of Supply of Electrical Energy in respect of premises where there were arrears of electricity charges by the previous consumer.
2. Appellant purchased an extent of 28 cents of land along with a factory building in Sy. No. 91/6 of Chengamanad Village in a public auction conducted by the Kerala Financial Corporation on 26-6-1990. Previously factory building was owned by one P. Krishnakutty, who availed of loan from the Kerala Financial Corporation for starting the unit by name Jeesha Enterprises. The unit was a consumer of the Board bearing consumer No. 3180. Large amounts were due to the Board by way of electricity charges. Since the amount was not paid by the consumer electric connection was disconnected by the Board on 28-12-1989. Board however could not dismantle the equipment since the unit was under the lock and key of the Corporation. Board later came to know that the unit was purchased by the appellant herein. Consequently they sent a arrear notice and informed the appellant that if the appellant was not willing to take reconnection. Board would take further steps in dismantling the metering equipment.
3. Appellant then sent a letter to the Board stating that electrical equipments be not dismantled and that he was willing to take fresh connection. Board was not willing to give the appellant fresh connection. Consequently they sent a communication dated 27-11-1995 to the appellant as well as to the previous consumer stating that if the amount was not paid on or before 13-12-1995, Board would dismantle metering equipment and without further notice recovery proceedings would be initiated for realisation of the dues from the original consumer. Appellant then approached this Court and filed O. P. No. 19356 of 1995 to quash the above mentioned notices and also for a declaration that the appellant was entitled to get fresh connection in premises in Sy. No. 91/6 of Chengamanad Village without paying arrears of the previous consumer. Original Petition was disposed of by this Court permitting the appellant to file a detailed representation before the Board and Board was directed to consider the same within a stipulated time. Appellant accordingly preferred Ext. P 7 representation dated 18-3-1999 requesting the Board to waive the demand in its entirety and also to refund the amount of Rs. 12,556.70 deposited by the appellant as a condition for stay of dismantling of electrical equipment. Representation preferred by the appellant was considered by the Board and Board vide its order dated 5-5-1999 rejected the same. Board informed the appellant that if the appellant desires to enjoy service connection, he should pay arrears due to the Board and execute fresh agreement and furnish additional security. Appellant was also informed that he was not entitled to waiver of arrear of current charges. Aggrieved by said order, appellant preferred the present Writ Petition for a declaration that appellant is not liable to pay arrears of the previous consumer. He also sought for a declaration that Regulation 15(c) of the Regulations relating to Conditions of Supply of Electrical Energy, which makes the bona fide purchaser liable to pay arrears of the previous consumer, is illegal and ultra vires. Learned single Judge did not find any infirmity in the order passed by the Board. Learned single Judge relied on a decision of this Court in Seena B. Kumar v. Asst. Executive Engineer, (1998) 2 KLT 109 : (AIR 1998 Ker 343). Learned single Judge took the view that if the appellant desires of getting fresh connection, he should pay the entire arrears due from the consumer of the premises. Aggrieved by the said judgment, appellant has filed this Writ Appeal.
4. When the matter came up for hearing we heard counsel for the appellant as well as standing counsel appearing for the Electricity Board. Counsel for the appellant submitted that the person who purchased the property in question through public auction cannot be fastened with liability of previous consumer in case he wants to continue electricity supply in the premises in question. Counsel relied on the decision of the Supreme Court in Isha Marbles v. Bihar State Electricity Board, (1995) 2 SCC 648 and contended that in identical circumstances, the Apex Court took the view that the auction purchaser cannot be made liable for the arrears due from the previous consumer. Counsel submitted that Regulation 15(c) which burdens the auction purchaser with liability of the previous consumer is unconstitutional and violative of Article 14 of the Constitution of India. Counsel further submitted that Regulations relating to Conditions of Supply of Electrical Energy were published in the gazette only on 15-12-1989. Consequently, appellant cannot be made liable for the arrears occurred prior to the coming into force of the Regulations. Counsel submitted in any view Regulations can have only prospective effect. Reliance was also placed on an unreported judgment of this Court in O. P. No. 9566 of 1987 and contended that in similar circumstances this Court declared that the new consumer is not bound to pay arrears of previous consumer.
5. Standing counsel for the Board however placed much reliance on Regulation 15 (a), (c) and (e) of the Regulations and submitted that if any person wants reconnection or fresh connection to a premises, which was in the possession of the previous consumer, he has to clear the arrears. Board is not bound to give either reconnection or fresh connection or to give continued supply of electrical energy, unless arrears are paid by the prospective consumer.
6. In order to examine the rival contentions, it is necessary to examine relevant provisions of the Electricity (Supply) Act. 1948 as well as Regulations relating to Conditions of Supply of Electrical Energy issued by the Board in exercise of the powers conferred under Section 79(j) of the Electricity (Supply) Act. Section 49 of the Electricity (Supply) Act, Act 54 of 1948, empowers the Board to determine the conditions on the basis of which supply of electricity is to be made. Section 78 enables the Government to frame rules to give effect to the provisions of the Act. Section 79 empowers the Board to make regulations not consistent with the Act and the rules made thereunder to provide for all or any of the matters set out therein. Section 79(j) enables the Board in laying down principles governing the supply of electricity to persons other than licensees under Section 49. It is in exercise of the powers conferred under Section 79(j) of the Act and other enabling provisions under the Statute that the Board framed Regulations relating to Conditions of Supply of Electrical Energy. The said Regulations were published in the Kerala Gazette dated 15-12-1989 and the Regulations came into force with effect from 1-1-1990. The scope of such Regulations framed by the Andhra Pradesh Electricity Board under Section 79(j) of the Act came up for consideration before the Supreme Court in Hyderabad Vanaspathi Ltd. v. A.P.S.E.B., AIR 1998 SC 1715. The Apex Court took the view that even in the absence of an individual contract, the terms and conditions of supply notified by the Board will be applicable to the consumer and he will be bound by them. After examining the scope of Sections 49 and 79(j) of the Act, the court held as follows (at page 1724) :
The section in the Act does not require the Board to enter into a contract with individual consumer. Even in the absence of an Individual contract, the terms and conditions of supply notified by the Board will be applicable to the consumer and he will be bound by them. Probably in order to avoid any possible plea by the consumer that he had no knowledge of the terms and conditions of supply, agreement in writing are entered with each consumer. That will not make the terms purely contractual. The Board in performance of a statutory duty supplied energy on certain specific terms and conditions framed in exercise of a statutory power. Undoubtedly the terms and conditions are statutory in character and they cannot be said to be purely contractual.
The Apex Court therefore reversed the decision of a Full Bench of the Andhra Pradesh High Court which held that the terms and conditions of supply are contractual. Apex Court also declared that the terms and conditions framed by the Board in exercise of its power under Sections 49 read with 79(j) of the Electricity (Supply) Act are statutory in character.
7. Counsel for the appellant, as we have already mentioned, placed much reliance on Isha Marbles (supra), wherein the Apex Court was dealing with the question whether the auction purchaser is liable to pay arrears of previous consumer for continued supply of electrical energy. Taking note of the fact that there was no law or regulations framed by the State Electricity Board so as to bind a new consumer, the Apex Court took that new consumer need not be made liable for the arrears of previous consumer. After holding so, the Apex Court held as follows :
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 that if it is held as above then 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 traunt with the public property but inadequacy of the law can hardly be a substitute for overzealous-ness.
We are of the view that facts of this case are entirely different. In this case, demand made by the Board is supported by statutory provisions, such as Regulation 15 of the Regulations. Therefore the principle laid down by the Apex Court in the above mentioned decision is inapplicable to the facts of this case. In this connection it is pertinent to note that Apex Court in the above mentioned decision stated that electricity is public property, and law in its majesty, benignly protects public property and behoves everyone to respect public property. Therefore the courts must be zealous in this regard.
8. We may now examine various provisions of Regulations relating to Conditions of Supply of Electrical Energy framed by the Board in exercise of powers conferred under Section 79 (j) of the Act. The relevant regulation, with which we are concerned, is extracted below :
15. Agreement for Service Connection
(a) Along with remittance of security deposit as mentioned in Para 14, the consumer should execute the service connection agreement in Form No. 7 annexed. The premises will not be connected up unless and until the agreement is executed. Thereafter, the service will be effected strictly in the order of priority. The consumer will be intimated the date and time at which the Board is intending to effect the service. When the consumer and the wiring contractor or his authorised agent should be present at the premises. Simply because an agreement has been executed the consumer is not entitled to get immediate connection and the Board will in no way be liable for the delay caused in giving connections according to priority or due to causes beyond its control, subject to the provisions under Schedule VI of the Indian Electricity Act.
(b) Provided that the service connection agreement executed by an authorised allottee within the premises owned by a Central/ State Government/Public Sector undertaking/Co-operative Societies/Local bodies shall be co guarantees by the authority effecting such allotment, failing which the procedure applicable to the service connection applied for by the occupier/tenant shall be followed.
(c) When there is transfer of ownership or right of occupancy of the premises the registered consumer shall Intimate the transfer of right of occupancy of the premises within 7 days to the Assistant Engineer/Assistant Executive Engineer concerned. On such intimation having been received the service shall be disconnected. If the transferee desires, to enjoy service connection, he shall pay of the dues to the Board and apply for transfer of ownership of service connection within 15 days and execute fresh agreement and furnish additional security. New consumer number shall be allotted in such cases cancelling the previous number.
(d) All dues to the Board from a consumer shall be the first charge on the assets of the consumer. All dues including penalty shall be realised as public revenue due on land.
(e) Reconnection or new connection shall not be given into any premises where there are arrears on any account due to the Board pending payment, unless the arrears including penalty, if any, are cleared in advance. If the new owner/occupier/allottee remits the amount due from the previous consumer, the Board shall provide recon-nection or new connection depending on whether the service remains disconnected/ dismantled, as the case may be. The amount so remitted will be adjusted against the dues from the previous consumer. If the Board gets the full dues from the previous consumer through RR action or other legal proceedings, the amount remitted by the new owner/occupier to whom connection has been effected shall be refunded. But the amount already remitted by him/her shall not bear any interest.
(f) When there are changes in the contract demand/connected load, tariff or provisions in the conditions of supply, the Board may require in writing the consumer to execute a fresh agreement in the form applicable within thirty days and the consumer shall comply with the same.
(g) in the event of no formal contract having been entered into between the Board and the consumer, the latter after once the supply of electricity has consumed, shall be bound by the terms and conditions of supply herein setforth. The consumer shall not refuse to enter into an agreement, if so required by the Board at any time after the supply is commenced, notwithstanding that the same has not been entered into before the supply has commenced. If the consumer fails to execute the agreement, the Board shall dismantle the services without notice and recover the dues by R.R. proceedings. In such cases, the date of commencement of contract in all cases shall be the date of commencement of supply by the consumer. If the date of commencement of supply is not traceable the consumer shall be liable to pay the current charges plus penal interest for a period of six months immediately preceding the date of detention of such illegal consumption of energy.
(h) if any consumer terminates his agreement within the period of agreement (or where no formal agreement is tendered if the supply is discontinued within the period which would have been applicable if an agreement had been tendered) he shall be liable to pay the minimum charges (service minimum, service line, rental charges and minimum guarantee amount) for the rest of the period of the agreement.
Notes :-- (1) The period of the agreement shall be as follows :
(a) weatherproof service two years
(b) Service on rental or service connection minimum guarantee three years.
(c) Line extension minimum guarantee-ten years.
(2) Service minimum or meter minimum wherever it occurs means-fixed charge based on connected load.
(i) L.T. and H.T. consumers are not ordinarily entitled for more than one service at a premises unless supply points of different voltages are required for special loads connected there, in which case the Board/ Inspector (in the case of H.T.) will analyse the problem in detail and after ensuring that there is no likelihood of any mix up of different services, may sanction such services. If a consumer has more than one service (not in one and the same premises) of his own he will be required to execute separate agreements for each service. For all purposes each service will be treated as Independent ones,
(j) The Board's officers authorised to execute service connection agreement are as follows :
E.H.T. Chief Engineer H.T. Dy. Chief Engineer Street light Executive Engineer LT Three Phase Asst.Exe. Engineer L.T. Single Phase Asst. Engineer.
Regulation 15 (a) obliges the prospective consumer to execute an agreement in Form No. 7-Agreement for the supply of energy (low tension). Clause 10 of the Agreement is also relevant which says that the consumer has to declare that the Book containing "Conditions of supply" of the Board has been carefully perused by him and that the consumer should agree to be bound by the terms and conditions contained therein and that the same would always form an integral part of the agreement. Regulation 15 (c) says that when there is transfer of ownership or right of occupancy of the premises the registered consumer shall intimate the transfer of right of occupancy of the premises within 7 days to the Asst. Engineer/Asst. Exe. Engineer concerned. On such intimation having been received, the service shall be disconnected. If the transferee desires to enjoy service connection he shall pay of the dues to the Board and apply for transfer of ownership of service connection within 15 days and execute fresh agreement and furnish additional security. New consumer number would be allotted in such cases, cancelling the previous number. It is provided in Regulation 15 (d) that all dues to the Board from a consumer shall be the first charge on the assets of the consumer and all dues including penalty shall be realised as public revenue due on land. It is therefore evident that in cases where transferee desires to enjoy service connection amount due to the Board should be paid or else. Board has a right to disconnect the supply, which was being enjoyed by the previous consumer. Board is not bound to give reconnection or new connection in the premises where there are arrears on any account due to the Board pending payment, unless the arrears including penalty are cleared in advance. If the new owner/occupier/allottee remits the amount due from the previous consumer, the Board shall provide reconnection or new connection depending on whether the service remains disconnected/ dismantled, as the case may be. It is also provided therein that if the Board gets the full dues from the previous consumer through R.R. action or other legal proceedings the amount remitted by the new owner/occupier to whom connection has been effected would be refunded. But the amount already remitted by him/her does not bear any interest.
9. The above mentioned statutory provisions positively show that the Board is not bound to provide electricity to a premises if there are arrears of electricity charges from the previous consumer, unless it is cleared. Contention raised by counsel for the appellant that Conditions of Supply of Electrical Energy framed by the Board will have only prospective effect, and arrears occurred prior to framing of such Regulations need not be paid by the appellant cannot be sustained. In the instant case, property in question was purchased by the appellant on 26-6-1990. Due to non-payment of the arrears by the previous consumer, electricity was already disconnected on 28-12-1989. When the appellant purchased the property in public auction, there was no electricity supply and the same was already disconnected. Appellant purchased property without any electric supply. Appellant claims for reconnec-tion or new connection of the premises. As far as the appellant is concerned, we are of the view that he is bound by the Regulations relating to Conditions of Supply of Electrical Energy, since electric connection was already disconnected prior to the said date of purchase by the appellant. Therefore the question as to whether Regulations have only prospective effect is really academic.
In the above mentioned circumstances, we do not find any infirmity in the judgment of the learned single Judge to be interfered with by this Court in Writ Appeal. Writ Appeal lacks merits and the same is dismissed.