Delhi High Court
Inndev Engineers (India) P. Ltd. vs Delhi Vidyut Board And Ors. on 23 July, 2002
Equivalent citations: AIR2002DELHI478, AIR 2002 DELHI 478, (2002) 99 DLT 248, (2003) 1 CIVILCOURTC 184, (2003) 2 RECCIVR 44
Author: R.C. Chopra
Bench: R.C. Chopra
ORDER R.C. Chopra, J.
1. The short question raised in this writ petition is as to whether the respondent No. 1, Delhi Vidyut Board can withdraw the supply of electricity to a consumer on account of non-clearance of arrears in respect of a different connection, at a different premises and in the name of a different consumer.
2. The facts relevant for disposal of this writ petition, briefly stated, are that the petitioner-Company incorporated in the year 1996 is having its factory at B-6, Mayapuri Industrial Area Phase-I, New Delhi. It gets its electricity supply from K. No. 014-5765296/1P/IS/H0009 which is in the name of previous owner of property. The two Directors of the petitioner-Company, namely Dutt Kumar and Sarla Kumar, are the Directors of M/s. S. D. Technical Services Private Limited also, which was having its factory at B-87, Mayapuri Industrial Area Phase-I, New Delhi. The electricity supply to the said factory was from K. No. XI 1925. This K. number was in the name of M/s. Ram Prakash Kamal Kishore, the landlords of the premises No. B-87, Mayapuri Industrial Area Phase-I, New Delhi. On account of certain demands raised by Delhi Vidyut Board and on account of some disputes between M/s. S. D. Technical Services Private Limited and M/s. Ram Prakash Kamal Kishore, the demand raised by Delhi Vidyut Board in respect of electricity connection at B-87, Mayapuri Industrial Area, New Delhi was not cleared which resulted in some legal proceedings. The petitioner-Company floated by the Directors of M/s. S. D. Technical Services (P) Ltd. started functioning from B-6, Maya Puri, Delhi where an electricity connection was available. However, the respondent-Delhi Vidyut Board transferred the arrears in respect of the electricity connection at B-87, Mayapuri Industrial Area to K. No. 014-5765296 at B-6, Mayapuri Industrial Area, Phase-I, New Delhi and disconnected the electricity supply through the said rneter. The present writ petition was filed assailing the transfer of the demand to K. number at B-6, Mayapuri Industrial Area, Phase-I, New Delhi. Directions were also sought for restoration of the electricity which had been disconnected on account of this demand. By interim orders and subject to certain terms, the electricity to the petitioner's premises was restored by this Court vide orders dated 29-5-1998.
3. The respondents have filed counter-affidavit challenging the petitioner's prayer for relief pleading that the petitioner-Company cannot claim that the petitioner and M/s. S. D. Technical Services Private Limited are two separate entities and as such the dues payable by M/s. S. D. Technical Services Private Limited are payable by the petitioner. It is pleaded that Shri Dutt Kumar, the Director of M/s. S.D. Technical Services Private Limited is the Director of the petitioner-Company also. It is also pleaded that by merely shifting his factory from B-87, Mayapuri Industrial Area Phase-1, New Delhi to B-6, Mayapuri Industrial Area Phase-I, New Delhi and by floating a new Company under the name of the petitioner-Company, the aforesaid Dutt Kumar cannot avoid liability incurred in respect of M/s. S. D. Technical Services Private Limited and as such, the respondents were fully Justified and legally entitled to transfer the arrears to the electricity connection at B-6, Mayapuri Industrial Area Phase-I, New Delhi so that Shri Dutt Kumar who is running his factory at the said premises, is compelled to clear the arrears. It is submitted that a dishonest consumer cannot be allowed to play truants with the public property and as such, the writ petition filed by the petitioner is liable to be dismissed.
4. I have heard learned Counsel for the parties and gone through the records of the case.
5. Learned Counsel for the petitioner, relying upon a Judgment of Supreme Court of India in Isha Marbles v. Bihar State Electricity Board, , has contended that the petitioner-Company being a separate legal entity and drawing electricity through a separate electricity meter installed at separate premises in the name of a different consumer could not be burdened with the liability incurred by another Company in respect of a different electricity meter installed at a different place. It Is also argued that disconnection of electricity supply to the petitioner without any notice under Section 24 of the Electricity Act, 1910 was illegal and unwarranted. Learned Counsel for the petitioner points out that even M/s. S. D. Technical Services (P) Ltd. was not the registered consumer in respect of electricity connection at B-87, Mayapuri Industrial Area Phase-I, New Delhi inasmuch as M/s. Ram Prakash Kamal Kishore, the landlords of the said premises were the registered consumers in respect of said electricity meter. The bills were always raised in the name of M/s. Ram Prakash Kamal Kishore and, therefore, M/s. S. D. Technical Services Private Limited even was not directly liable to clear the arrears in respect of the electricity consumer at the said premises. Learned Counsel for the petitioner contends that the transfer of the demand of Rs. 19,94,345.23 p., which was regarding connection at B-87, Mayapuri Industrial Area, Phase-I, New Delhi and disconnection of supply to connection at B-6, Mayapuri Industrial Area, Phase-I, New Delhi was illegal and unwarranted inasmuch as there were no arrears in respect of the electricity consumption at B-6, Mayapuri Industrial Area, Phase-I, New Delhi.
6. Learned Counsel for the respondents has controverter the pleas raised by learned Counsel for the petitioner relying upon the judgment of Isha Marbles (supra) itself by contending that the Apex Court in no uncertain terms has held that electricity is a public property and the Courts must be jealous to protect this public property and should not permit dishonest consumers to transfer their units from one place to another and from time to time without payment of dues to the extent of lakhs and lakhs of rupees by saying that they are not liable to clear the liability. Learned Counsel for the respondents has further argued that the petitioner-Company and M/s. S. D. Technical Services Private Limited are not different entities inasmuch as they both belong to the same family except that in the case of the petitioner-Company, the landlords of the property No. B-6, Mayapuri Industrial Area, Phase-I, New Delhi, who had transferred their leasehold rights in favor of Dutt Kumar and his wife Sarla Kumar, were added as Directors. It is submitted that the electricity at B-87, Mayapuri Industrial Area, Phase-I, New Delhi was being consumed by M/s. S. D. Technical Services Private Limited and they had been making certain payments also, but when the demands accumulated heavily, they decided to shift their unit to B-6, Mayapuri Industrial Area, Phase-I, New Delhi and, thereafter, avoided to clear the dues. It is also submitted that M/s. S. D. Technical Services Private Limited had also filed a writ petition in the High Court in which interim orders were passed regarding deposit of arrears with the respondents, but the same were not deposited and as such, their electricity was disconnected on 9-7-1994. It was thereafter that the present Company was incorporated and the entire work of M/s. S. D. Technical Services Private Limited was shifted to the new place. Mr. Dutt Kumar, Director of the petitioner-Company was the Director of M/s. S. D. Technical Services Private Limited also and he was the person who playing traunts for avoiding payment of the arrears to the respondents by dishonestly constituting the present petitioner-Company. Learned Counsel for the respondents admitted that there were inter se disputes between the M/s. S.D. Technical Services Private Limited and the landlords of property No. B-87, Mayapuri Industrial Area, Phase-I, New Delhi, M/s. Ram Prakash Kamal Kishore regarding which a suit bearing No. 3729/90 was pending in the High Court. Learned Counsel for the respondents contends that consumers like the petitioner have no right to invoke the jurisdiction of the Court under Article 226 of the Constitution of India as the petition is mala fide and aimed at avoiding its liability in respect of the electricity consumed at a separate place.
7. The Apex Court in the case of Isha Marbles v. Bihar State Electricity Board (supra), had the occasion to consider the issues relating to the liability of a new owner of the premises regarding which the arrears on account of electricity dues exist. The Court was dealing with a bunch of Civil Appeals, but this Court may focus on the facts of the appeals of Isha Marbles v. Bihar State Electricity Board and Bihar State Electricity Board v. Waxpol Industries only. In the appeal of Isha Marbles, the appellant was a purchaser of mortgaged property in an open auction held by the Corporation. There were certain dues in regard to the supply of electricity against the previous owner and as such, when the appellant got possession of the unit, his electricity connection was disconnected and he was called upon to discharge the liability of the previous owner. The writ petition filed by Isha Marbles was dismissed by the High Court holding that Electricity Board was entitled to take action against it but the Apex Court came to the conclusion that the liability to pay electricity dues is fastened only on the consumer and Section 24 of the Electricity Act could be invoked only against the person to whom energy had been supplied in terms of Section 2(c) of the Electricity Act. It was held that where the premises came to be owned or occupied by an auction purchaser and when such purchaser asked for supply of electricity, he could not be called upon to clear the past arrears as a condition precedent for supply. It was held that the Electricity Board could not seek enforcement of a contractual liability against a third party who was not party to the contract. The appeal of Isha Marbles, therefore, was allowed by the Apex Court.
8. The Apex Court also disposed of an appeal titled Bihar State Electricity Board v. Waxpol Industries in which case the facts were somewhat different. M/s. Neo Chemicals and Metal Products Private Limited was running a unit but on account of non-payment of electricity bills, its electricity was disconnected. Bihar Financial Corporation, which had given some loan to the said Company sold its property under Section 29 of the Corporation Act. The sale was through an advertisement. M/s. Waxpol Industries filed a tender which was the highest and as such, the properties of M/s. Neo Chemicals and Metal Products Private Limited were sold in favor of M/s. Waxpol Industries. When M/s. Waxpol Industries applied for electricity connection, the Board raised the previous demand and pleaded its inability to restore electricity unless its dues were cleared either by the same or by the subsequent occupant of the premises. M/s. Waxpol Industries filed a writ petition in the High Court, which was allowed on the ground that Neo Chemicals and Waxpol Industries were two distinct Companies and separate legal entitles and as such, the liability of Neo Chemicals to pay electricity dues could not be fastened upon M/s. Waxpol Industries. It was pointed out before the Apex Court that the Directors of M/s. Neo Chemicals and the Waxpol Industries were members of the same family inasmuch as Neo Chemicals was having the wives of Directors of Waxpol Industries as its Director. The Apex Court in para 63 of the judgment expressed its anguish in regard to inadequacy of laws to enforce the liability of the previous contracting party against a third party pointing out that dishonest consumers could not be allowed to play truant with public property, but observed that inadequacy of the laws could hardly be a substitute for over-zeal-ousness. M/s. Neo Chemicals and Metal Products Private Limited the previous owner were held liable for the past arrears and the judgment of the High Court in favor of M/s. Waxpol Industries was upheld.
9. In Isha Marbles case (supra), the Apex Court, in no uncertain terms declared that Section 24 of the Electricity Act could be invoked only against the person to whom the energy had been supplied. In Bihar State Electricity Board v. Green Rubber Industries, . it was held that the relationship between the Electricity Board and the consumer was purely contractual. In para 24 of the judgment, it was further held that the Board could not insist upon somebody else to pay the arrears of the earlier consumer as a condition for providing electricity connection. It was also held that Board could not foist obligation to pay the dues on a subsequent bona fide purchaser. In para 53 of the judgment, it was observed that Section 24 was a remedy available to the Electricity Board but the general remedy to file a suit was always available to it. The Apex Court, therefore, clearly laid down that the liability to clear the arrears rests upon a consumer only and cannot be transferred to others as per the scheme of the Act.
10. In the present case, although it is shown on record that the petitioner company and M/S. S. D. Technical Services private Limited belong to the same group of promoters, but still the fact remains that these are two separate legal entities. The supply of electricity at premises No. B-87, Mayapuri Industrial Area Phase-I, New Delhi was in the name of none of these two Companies and the consumers there in were M/s. Ram Prakash Kamal Kishore, the landlords of the said premises. It is also shown on record that there were certain disputes between M/s. S. D. Technical Services Private Limited and M/s. Ram Prakash Kamal Kishore on account of consumption of electricity, as a result of which there was litigation also. The supply of electricity to the petitioner Company at premises No. B-6, Mayapuri Industrial Area Phase-1, New Delhi through K. No. 014-57296/1P/1S/H0009 was under a different contract between the respondents and the erstwhile owner of those premises and it was not at all subject to any liability in respect of some other connection in the name of some other consumer. Therefore, the impugned action of the respondents in disconnecting electricity supply to the petitioner's premises No. B-6, Mayapuri Industrial Area, Phase-I, New Delhi after transferring the arrears in respect of K. No. XI 1925 at B-87, Mayapuri Industrial Area, Phase-I, New Delhi was neither justifiable nor sustainable in law. The respondents are certainly entitled to initiate all possible steps for the recovery of dues, including disconnection of electricity, against their registered consumer but they have no right to proceed against a third party with whom they have no privity of contract. If a registered consumer permits a third party to use electricity from his connection, it is a matter between the consumer and such third party only. In case of any default in payment of dues, it is the registered consumer only who is liable to make payments to the supplier DVB. In case the registered consumer has any sustainable claim against the third party who has been consuming electricity supplied through his meter, he may make recoveries from such a third party but the supplier DVB has no concern with any dispute between the registered consumer and the third party nor can it initiate any action against such third party for the reason that there is no privity of contract between the two. This Court, therefore, has no hesitation in holding that the respondents have no right to enforce the recovery of dues in question by disconnection of supply to the petitioner who is using electricity from a separate connection and at a different premises the bills of which are being paid regularly.
11. In para 53 of Isha Marbles case , the Apex Court clearly observed that Section 24 of the Electricity Act was not the only remedy available to the Electricity Board, but they had a general remedy also by way of filing a suit. This Court fails to understand as to why even after disconnection of the electricity to the premises No. B-87, Mayapuri Industrial Area, Phase-1, New Delhi and in the face of writ petitions challenging the liability to pay, the respondents did not wake up to file a suit for recovery of the arrears in accordance with law. Prudence demands that the respondents should be prompt in disconnecting the electricity supply, of course in accordance with law, when arrears are not being cleared in spite of demands but thereafter also the respondents should be vigilant to file suit for recovery also if it is found that the arrears are not being cleared/paid in spite of disconnection.
12. The question raised in this Writ petition, therefore, is answered by holding that the respondent No. 1 DVB has no right to withdraw the supply of electricity to a consumer on account of non-clearance of arrears in respect of a different connection, at a different place and in the name of a different consumer. This Court is of the considered view that the impugned action of She respondents in transferring arrears in the sum of Rs. 19,94,345.23p. in respect of K. No. XI of 1925 installed at premises No. B-87, Mayapuri Industrial Area, Phase-I, New Delhi to the connection No. K.014-5765296 at B-6. Mayapuri Industrial Area Phase-1, New Delhi was illegal, arbitrary, unwarranted and unjust. The impugned orders, therefore, are set aside and the respondents are restrained from disconnecting electricity supply to the petitioner's premises No. B-6. Mayapuri Industrial Area, Phase-I, New Delhi on account of non-payment of Rs. 19,94,345.23P., which were the arrears in respect of K. No. XI of 1925 at premises No. B-87, Mayapuri Industrial Area, Phase-1, New Delhi.
13. The petition stands disposed of accordingly.