Gujarat High Court
Hotel Satyaketu vs Madhya Gujarat Vij Company Ltd on 20 April, 2017
Equivalent citations: AIR 2017 (NOC) 1063 (GUJ.)
Author: C.L.Soni
Bench: C.L. Soni
C/SCA/5071/2003 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 5071 of 2003
With
SPECIAL CIVIL APPLICATION NO. 6015 of 2003
With
SPECIAL CIVIL APPLICATION NO. 14766 of 2004
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE C.L. SONI Sd/-
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of No
the judgment ?
4 Whether this case involves a substantial question of No
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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HOTEL SATYAKETU....Petitioner(s)
Versus
MADHYA GUJARAT VIJ COMPANY LTD....Respondent(s)
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Appearance in Special Civil Application No.5071 of 2003:
MR A J PATEL, ADVOCATE for the Petitioner(s) No. 1
MS LILU K BHAYA, ADVOCATE for the Respondent(s) No. 1
Appearance in Special Civil Application No.6015 of 2003:
MR SATYAM CHHAYA, ADVOCATE for the Petitioners
MS LILU K BHAYA, ADVOCATE for the Respondent
Appearance in Special Civil Application No.14766 of 2004:
MR RAJESH K SAVJANI, ADVOCATE for the Petitioner
MR SWAPNESHWAR GAUTAM, AGP for Respondent No.1
MS LILU K BHAYA, ADVOCATE for the Respondent(s) No.2
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CORAM: HONOURABLE MR.JUSTICE C.L. SONI
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C/SCA/5071/2003 JUDGMENT
Date : 20/04/2017
COMMON ORAL JUDGMENT
1. In all these petitions filed under Article 226 of the Constitution of India, common grievance is made against insistence of the Gujarat Electricity Board- now the Vij Company (to be referred as "the Company") for payment of the outstanding dues of the erstwhile consumers, whose premises are purchased by the petitioners in auction, for giving electric connection to the petitioners.
2. It is the case of the petitioners that they have purchased the units of the erstwhile consumers in public auction and they are not required to discharge any liability of the erstwhile consumers and they cannot be denied electric connection by the company by insisting that they should first discharge the outstanding dues of the erstwhile consumers. However, the stand of the Company is that by virtue of the condition No.2(j) inserted in conditions for supply of electricity in exercise of the powers under Section 49 of the Electricity Supply Act, 1948 ('the Supply Act'), the company is entitled to insist for payment of the outstanding dues of the erstwhile consumers by the petitioners- purchasers of the units of the erstwhile consumers as precondition for giving electric connection to them.
3. Condition No.2(j) which was inserted in condition of supply vide notification dated 10.8.2001 reads as under:-
Recovery of old dues-
Reconnection or new connection for any premises, where there are arrears of the Board p[ending from the consumer/ occupier, shall not be entertained. The new successor/ occupier has to clear these dues of the previous consumer before the application of successor/ occupier is processed for supply of electricity. If the Board, at a later date, gets the full or part of these dues from the previous consumer, the amount shall be refunded to the successor/ occupier after adjusting the Page 2 of 17 HC-NIC Page 2 of 17 Created On Sat Aug 12 17:21:12 IST 2017 C/SCA/5071/2003 JUDGMENT costs including legal expenses to recover such arrears and the refund shall bear no interest.
4. The above condition No.2(j) is held to be statutory in character by the Division Bench of this Court vide its judgment dated 18.7.2005 in Letters Patent Appeal No.696 of 2003 and allied appeals. In the said judgment, Division Bench also held that it did not find anything manifestly arbitrary in Board's insistence on the deposit of the arrears of the electricity charges/ dues as a condition precedent for restoration of the supply or release of fresh connection. Before the Division Bench, judgment in the case of Isha Marbles Vs. Bihar State Electricity Board reported in JT 1995(2) SC 626 was relied. The Division Bench found that in the case of Isha Marbles (Supra), there was no statutory provision under which the Board required the prospective consumer to deposit arrears of electricity dues payable by the former consumer and therefore, held that the ratio of the judgment in Isha Marbles (supra) could not be applied to the cases where insistence for recovery of the past dues was based on condition No.2(j), which is statutory in character and contains a specific provision for payment of the arrears of the electricity dues as a condition precedent for restoration of the connection or grant of fresh connection.
5. In the case of Hyderabad Vanaspathi Ltd. Vs. A.P. State Electricity Board and others reported in (1998)4 SCC 470, Hon'ble Supreme Court has held that the terms and conditions for supply of the electricity to consumers, notified by the Board in exercise of the powers under Section 49 and made applicable to all consumers availing supply of the electricity are statutory in character.
6. The case of the petitioner of the first petition, being Special Civil Application No.5071 of 2003 is that it purchased the unit of the erstwhile consumer in public auction held by the Gujarat State Page 3 of 17 HC-NIC Page 3 of 17 Created On Sat Aug 12 17:21:12 IST 2017 C/SCA/5071/2003 JUDGMENT Financial Corporation ('GSFC') on 10.7.2000 and it was handed over the possession of the property purchased on 14.8.2000, whereas the condition No.2(j) was introduced for the first time on 14.8.2001 and therefore, the company was not justified in insisting for payment of the dues of the erstwhile consumer as a pre-condition for giving electricity connection pursuant to the application made by the petitioner on 1.2.2003.
7. Learned advocate Mr. Patel for the petitioner submitted that the case of the petitioner would stand covered by the decision in the case of Isha Marbles (supra).
8. As against the above argument, learned advocate Ms. Bhaya submitted that what is to be considered for the purpose of applying condition No.2(j) is the date of the application for electric connection. She submitted that undisputably, the petitioner applied for electric connection subsequent to framing of condition No.2(j) by the company in exercise of the powers under Section 49 of the Supply Act.
9. The Court finds that since the petitioner made application after newly inserted condition No.2(j), the case of the petitioner would stand covered by such condition. When the condition No.2(j) specifically provides for recovery of the old dues when reconnection or new connection for any premises held by earlier consumer/ occupier is asked, the recovery of old dues could be insisted if application is made subsequent to insertion of condition No.2(j). In the case of Dakshin Haryana Bijli Vitran Nigam Ltd. Paramount Polymers (P) Ltd. reported in (2006)13 SCC 101, Hon'ble Supreme Court while considering the question as regards insistence of the Vij Company for payment of the past dues from the person seeking fresh connection, has held and observed in the context of such similar Page 4 of 17 HC-NIC Page 4 of 17 Created On Sat Aug 12 17:21:12 IST 2017 C/SCA/5071/2003 JUDGMENT condition, being Clause No.21-A inserted in the terms and conditions of supply of the electricity energy, by the company in exercise of the powers under Section 49 of the Supply Act, in para 11,15,16 and 17 as under:-
11. According to us, the High Court has gone wrong in holding that this newly inserted clause 21A of the terms and conditions was not applicable to the first respondent. It is true that the sale of the undertaking at the instance of the Financial Corporation to the first respondent was prior to 27.11.2001 and possession was also given to the first respondent on 22.4.1999, prior to the insertion of clause 21A. But going by clause 21A(c) it is clear that even if the view taken by the High Court that the relevant date is the date of sale in favour of the first respondent is accepted, even then, the appellant would be entitled to apply sub-clause (b) of clause 21A to the first respondent as an existing consumer, since defaulting amount existed against the premises occupied by the first respondent.
We are also not in a position to agree with the High Court that the relevant date is the date of sale of the undertaking by the Financial Corporation to the first respondent. The insertion of clause 21A was circulated by the communication dated 27.11.2001 and it was subsequently followed by the formal notification in terms of Section 49 of the Supply Act read with Section 79(j) of that Act. The first respondent having applied for a fresh connection only on 1.1.2002, the application would be governed by the terms and conditions including the term inserted on 27.11.2001, as subsequently formally notified. In the writ petition filed on 27.2.2002 in that behalf, the court could not have come to the conclusion that the application made by the first respondent was not governed by the amended terms and conditions including clause 21A thereof. It is not as if the first respondent was an ignorant party. Before submitting its bid to the Financial Corporation the first respondent would certainly have inspected the premises and could have come to know that power connection to the premises had been snapped and this information should have put it on reasonable enquiry about the reasons for the power disconnection leading to the information that the previous owner of the undertaking or consumer was in default. Moreover, the appellant had clearly written to the Financial Corporation even before the sale was advertised by it, informing it that a sum of Rs.64,23,695/- was due towards electricity charges to the appellant and when selling the undertaking, that amount had to be provided for or kept in mind. Therefore, any reasonable enquiry by the first respondent as a prudent buyer would have put it on notice of the subsistence of such a liability. The sale was also on 'as is where is' basis. On our interpretation of clause 21A of the Terms and Conditions of Supply as inserted with particular reference to clauses (b) and (c) thereof, we are of the view Page 5 of 17 HC-NIC Page 5 of 17 Created On Sat Aug 12 17:21:12 IST 2017 C/SCA/5071/2003 JUDGMENT that the said clauses clearly applied to the first respondent when it made an application on 1.1.2002 seeking a fresh connection for the premises.
15. We must observe that the decision in Isha Marbles (supra) is by itself not an answer to the validity of clause 21A of the terms and conditions inserted by notification. Under Section 49 of the Supply Act, the licensee or rather, the Electricity Board, is entitled to set down terms and conditions for supply of electrical energy. In the light of the power available to it, also in the context of Section 79(j) of the Supply Act, it could not be said that the insertion of clause 21A into the Terms and Conditions for supply of electrical energy is beyond the power of the appellant. It is also not merely contractual. This Court in M/s Hyderabad Vanaspati Ltd. Vs. Andhra Pradesh State Electricity Board and others has held that the Terms and Conditions for Supply of Electricity notified by the Electricity Board under Section 49 of the Electricity (Supply) Act are statutory and the fact that an individual agreement is entered into by the Board with each consumer does not make the terms and conditions for supply contractual. This Court has also held that though the Electricity Board is not a commercial entity, it is entitled to regulate its tariff in such a way that a reasonable profit is left with it so as to enable it to undertake the activities necessary. If in that process in respect of recovery of dues in respect of a premises to which supply had been made, a condition is inserted for its recovery from a transferee of the undertaking, it cannot ex facie be said to be unauthorized or unreasonable. Of course, still a court may be able to strike it down as being violative of the fundamental rights enshrined in the Constitution of India. But that is a different matter. In this case, the High Court has not undertaken that exercise.
16. The position obtaining in Isha Marbles (supra) was akin to the position that was available in the case on hand in view of the Haryana Government Electrical Undertakings (Dues Recovery) Act, 1970. There was no insertion of a clause like clause 21A as in the present case, in the Terms and Conditions of Supply involved in that case. The decision proceeded on the basis that the contract for supply was only with the previous consumer and the obligation or liability was enforceable only against that consumer and since there was no contractual relationship with the subsequent purchaser and he was not a consumer within the meaning of the Electricity Act, the dues of the previous consumer could not be recovered from the purchaser. This Court had no occasion to consider the effect of clause like clause 21A in the Terms and Conditions of Supply. We are therefore of the view that the decision in Isha Marbles (supra) cannot be applied to strike down the condition imposed and the first respondent has to make out a case independent on the ratio of Isha Marbles (supra), though it can rely on its ratio if it is helpful, for attacking the insertion of such a condition for supply of electrical energy. This Court was essentially dealing with the construction of Section 24 of the Page 6 of 17 HC-NIC Page 6 of 17 Created On Sat Aug 12 17:21:12 IST 2017 C/SCA/5071/2003 JUDGMENT Electricity Act in arriving at its conclusion. The question of correctness or otherwise of the decision in Isha Marbles (supra) therefore does not arise in this case especially in view of the fact that the High Court has not considered the question whether clause 21A of the terms and conditions incorporated is invalid for any reason.
17. In the light of what we have stated above we think that the proper course to adopt is to set aside the judgments of the learned Single Judge and that of the Division Bench and remit the writ petition filed by the first respondent to the High Court for a fresh decision in accordance with law. The first respondent would be free to amend its writ petition including the prayers therein and in the case of such an amendment the appellant would be entitled to file an additional statement in opposition. The writ petition will be considered afresh by the High Court in the light of what we have stated above.
10. So far as the question about validity of the condition No.2(j) is concerned, as stated above, Division Bench of this Court has already held it to be valid and found the same as having statutory character. Therefore, in light of the judgment in the case of Paramount Polymers Ltd. (supra), since the petitioner of the first petition had made application subsequent to introduction of condition No.2(j), insistence of the Company for payment of the past dues to grant electric connection to the petitioner, though it is an auction purchaser, cannot be said to be illegal. Therefore, no relief could be granted to the petitioner. The first petition is therefore, required to be dismissed. However, learned advocate Mr. Patel submitted that the erstwhile Board- the Vij Company has already filed suit, being Civil Suit No.867 of 1999, for recovery of the electricity dues from the erstwhile consumer of Rs.8,86,307.56 and therefore, the Court may observe that if the Board- the company succeeded in the suit for recovery of the above-said dues, the Board shall refund the amount recovered from the petitioner for granting electric connection to the petitioner. Learned advocate Ms. Bhaya fairly stated that as and when the company succeeds in the suit and recovers dues from the erstwhile consumer, the company is to refund the amount paid by the petitioner, to the petitioner.
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11. As regards second petition, being Special Civil Application No.6015 of 2003, the case of the petitioners is that the petitioners purchased the unit of the erstwhile consumer in the auction held by the GSFC and were put into possession of the property on 1.5.1999. The petitioners then applied for electric connection on 3.4.2000 and though the petitioners paid requisite fees and inspection was carried out to examine feasibility of the premises for providing High Tension Supply to the petitioner No.1 company, the petitioners were insisted to clear the outstanding dues of Rs.4,20,260/- of the erstwhile consumer for giving power supply to the petitioners.
12. In this petition, one of the prayers made is to quash and set aside the circular issued by the respondent Electricity Board- the company dated 10.8.2001, whereby the condition No.2(j) was incorporated in the Board's conditions and miscellaneous charges for supply of the electric energy. Such prayer is now not required to be considered in view of the judgment of Hon'ble Division Bench holding that condition No.2(j) is valid.
13. However, for the remaining prayer, i.e. to direct the Company to give electric connection without insisting for payment of the dues of the erstwhile consumer, learned advocate Mr. Satyam Chhaya for the petitioners submitted that undisputably, the application made by the petitioners for electric connection was much prior to introduction of the condition No.2(j) in the conditions for supply of electric energy. He submitted that after the petitioners applied for electric connection on 3.4.2000, though the petitioners were made to pay requisite charges and though feasibility for supply of the electric energy was fully examined, the company insisted for clearance of the outstanding dues of the erstwhile consumer and did not give electric connection to the petitioners. Mr. Chhaya submitted that the petitioners went on requesting the company not to insist for payment of any past dues by Page 8 of 17 HC-NIC Page 8 of 17 Created On Sat Aug 12 17:21:12 IST 2017 C/SCA/5071/2003 JUDGMENT the petitioners as precondition for supply of the electricity to the petitioners, however the company did not take any action for long time and continued to act contrary to the law laid down by Hon'ble Supreme Court in the case of Isha Marbles (supra).
14. Learned advocate Ms. Bhaya on the other hand submitted that the petitioners though applied for electric connection prior to introduction of condition No.2(j), however for no good explanation, the petitioners caused delay in approaching this Court and before the petitioners could file this petition before this Court, condition No.2(j) was already introduced. She submitted that on account of delay and laches on the part of the petitioners in approaching this Court and since in the meantime, condition No.2(j) was introduced, whereby the petitioners will be required to clear the dues of the erstwhile consumer for getting reconnection on the premises purchased by the petitioners in the public auction, this Court may not grant any relief to the petitioners in exercise of the powers under Article 226 of the Constitution of India.
15. The Court having heard learned advocates for both the sides, however finds that as on the date when the petitioners applied for electric connection, undisputably, there was no condition having statutory recognition, under which the company could have insisted for payment of the dues of the erstwhile consumer as a precondition for supply of the electric connection to the petitioners. If there was no such condition in existence at the time of application of the petitioners, the case of the petitioners was covered by the judgment of Hon'ble Supreme Court in the case of Isha Marbles (supra). Therefore, insistence of the company upon the petitioners to first clear the outstanding dues of the erstwhile consumer to get electric connection at the premises of the erstwhile consumer purchased by the petitioners in auction was in clear breach of the law laid down by Page 9 of 17 HC-NIC Page 9 of 17 Created On Sat Aug 12 17:21:12 IST 2017 C/SCA/5071/2003 JUDGMENT Hon'ble Supreme Court and in breach of the law laid down by Hon'ble Supreme Court, if the company continued to insist to first clear the dues of the erstwhile consumer to give electric supply to the petitioners, the petitioners could not be denied relief on the ground that the petitioners are responsible for delay and laches in approaching this Court. The Company also cannot be permitted to take advantage of the time gap between the date of the insistence by the company to clear the dues after the petitioners made application for electric connection and the date of filing of the petition during which the condition No.2(j) was introduced. Entitlement of the petitioners to have electric connection at the premises purchased by them in auction without making any payment towards the dues of the erstwhile consumer is required to be decided in the context of application for connection vis-a-vis the date of introduction of condition No.2(j) in the conditions for supply of the electricity and in the context of the law laid down by Hon'ble Supreme Court in the case of Isha Marbles (supra). No discussion is required that as per the decision of Hon'ble Supreme Court in the case of Isha Marbles (supra), the petitioners were entitled to have electric connection, in absence of any condition statutorily recognized like condition No.2(j), without payment of the dues of the erstwhile owner. In such view of the matter, the petitioners could not be denied relief simply on the ground of delay in approaching this Court. The second petition is therefore, required to be allowed.
16. So far as third petition, being Special Civil Application No.14766 of 2004, is concerned, the case of the petitioner is that the petitioner purchased building and machineries of the erstwhile consumer for an amount of Rs.2,91,000/- in the auction held by GSFC and the petitioner was given possession of the property on 15.6.2004. It is the case of the petitioner that the Government vide circular dated 7.2.2004 at Annexure-A came out with a policy that the auction Page 10 of 17 HC-NIC Page 10 of 17 Created On Sat Aug 12 17:21:12 IST 2017 C/SCA/5071/2003 JUDGMENT purchaser is not required to clear the dues of the erstwhile owner payable to the local authorities, including the GEB. The petitioner has averred that the petitioner made application for 20 H.T.- 3 Phase power supply to the electricity Board on 9.8.2004 and the Board by its letter dated 21.8.2004 asked the petitioner to first clear the dues of Rs.44,163.90 of its erstwhile consumer to get electric supply at the premises purchased by him. The petitioner has raised contention that in view of the circular date 7.2.2004 of the Government, insistence by the Board to first discharge the dues of erstwhile consumer was illegal, arbitrary, unreasonable and unjust.
17. Learned advocate Mr. Savjani for the petitioner submitted that as per the circular dated 7.2.2004, the company was entitled to get only the amount fixed on pro-rata basis from the amount fetched in auction by GSFC towards its outstanding dues against the erstwhile consumer and is not to recover any amount from the auction purchaser in connection with the outstanding dues of the erstwhile consumer for giving connection to the auction purchaser who purchases the property of the erstwhile consumer after 7.2.2004. Mr. Savjani took the Court to the circular dated 7.2.2004 and also drew the attention of the Court to the circular at Annexure-I dated 20.1.2005 of the company so as to point out that the company has accepted the decision of the competent authority and adopted the procedure to be followed as per the Government Resolution dated 7.2.2004 for the purpose of giving connection to the auction purchaser after 7.2.2004. Mr. Savjani submitted that the company is insisting for clearance of the dues of the erstwhile owner from the petitioner only on the ground that the auction of the property of the erstwhile owner was held prior to the circular dated 7.2.2004. Mr. Savjani submitted that as per the communication of GSFC at Annexure-II to the rejoinder addressed to the Chief Engineer of the company, the petitioner was sold the property of the erstwhile Page 11 of 17 HC-NIC Page 11 of 17 Created On Sat Aug 12 17:21:12 IST 2017 C/SCA/5071/2003 JUDGMENT consumer on 22.3.2004 and recommended that the benefit of the circular dated 7.2.2004 was available to the petitioner. Mr. Savjani thus urged to allow the petition and order the company to refund the amount paid by the petitioner pursuant to the interim order made by this Court dated 25.3.2005.
18. Learned advocate Ms. Bhaya submitted that as mentioned in Clause No.8 of the circular dated 7.2.2004, the provisions made in the circular shall apply only in the cases where auction is held by GSFC after the date of the circular. She submitted that the petitioner purchased the property of the erstwhile consumer in auction held prior to the date of the circular and therefore, he cannot claim benefit under the circular. She submitted that even otherwise, the circular would not override the condition No.2(j) statutorily framed in exercise of the powers under Section 49 of the Supply Act and therefore, the company is justified in insisting upon the petitioner to first pay the dues of the past consumer to get electric connection. She also submitted that when the circular dated 7.2.2004 of the Government cannot override the condition No.2(j), the circular dated 20.1.2005 relied by the petitioner has no relevance and cannot take away the powers of the company to insist payment of the dues of the past consumer from the auction purchaser before giving electric connection to him. She submitted that in any case till the Division Bench decided on validity of condition No.2(j), there was no occasion for the Government to make policy on the aspect of payment of dues of past consumers and therefore, the resolution dated 7.2.2004 could not be said to have any legal efficacy. Learned Assistant Government Pleader Mr. Swapneshwar Gautam is heard in the matter.
19. The Court having heard learned advocates for both the sides finds that purchase of the unit of the erstwhile consumer in the Page 12 of 17 HC-NIC Page 12 of 17 Created On Sat Aug 12 17:21:12 IST 2017 C/SCA/5071/2003 JUDGMENT auction held by GSFC by the petitioner was confirmed by GSFC on 2.6.2004 after such sale was sanctioned by the Director on 22.3.2004 as mentioned in communication dated 23.2.2005 at Annexure-II to the affidavit-in-rejoinder of the petitioner. In such communication, the GSFC has further mentioned that the sale of the property of the erstwhile consumer was made to the petitioner after 7.2.2004 and the benefit of the circular dated 7.2.2004 was available to the petitioner. From such communication of GSFC, which had sold the property of the erstwhile consumer to the petitioner, it could be said that the petitioner purchased the property in auction after 7.2.2004 and the circular dated 7.2.2004 would therefore apply to the case of the petitioner. As per policy of the Government circular dated 7.2.2004, the company is not to recover dues of the erstwhile consumer from the petitioner for giving him electric connection at the premises of the erstwhile consumer purchased by the petitioner.
20. Learned advocate Ms. Bhaya however submitted that the circular dated 7.2.2004 has no legal basis as it runs counter to condition No.2(j) and cannot override condition No.2(j) having statutory character. Learned advocate Mr. Savjani on the other hand submitted that the circular dated 7.2.2004 could be said to have been issued in exercise of the powers under Section 78(A) of the Supply Act. Section 78(A) reads as under:-
78-A. DIRECTIONS BY THE STATE GOVERNMENT. -
(1) In the discharge of its functions, the Board shall be guided by such directions on questions of policy as may be given to it by the State Government.
(2) If any dispute arises between the Board and the State Government as to whether a question is or is not a question of policy, it shall be referred to the Authority whose decision thereon shall be final.] Mr. Savjani submitted that under Section 78(A) of the Supply Act, the Page 13 of 17 HC-NIC Page 13 of 17 Created On Sat Aug 12 17:21:12 IST 2017 C/SCA/5071/2003 JUDGMENT State Government is authorized to make policy in public interest to be followed by the company and the Government in the public interest came out with a policy by circular dated 7.2.2004 and therefore, the company is bound to act as per the policy of the Government. He submitted that in fact, if any dispute as regards following the policy arises between the State Government and the company, is to be raised before the competent authority under Sub-section (2) of Section 78(A) of the Supply Act and the decision of the competent authority shall be binding to the company and the State Government.
He submitted that the circular at Annexure-I clearly reveals that the matter in connection with the circular dated 7.2.2004 for recovery of the past dues in connection with the units sold in auction by GSFC and GIIC was reviewed by the competent authority and pursuant to the decision of the competent authority, the company decided to give benefit of the circular dated 7.2.2004 of the Government.
21. In the context of the above-said circular dated 20.1.2005 at Annexure-I to the rejoinder, when the Court asked learned advocate Ms. Bhaya to get instruction as regards the decision of the competent authority, she could not bring to the notice of the Court anything contrary to the facts stated in the said circular at Annexure-I. The said circular reads as under:-
The Government of Gujarat had issued a Government Resolution bearing No.GFC(GIC)102003-1711-P dated 07.02.2004 regarding recoveries of pending dues of the units sold through auction by GSFC and GIIC under section 29 of the State Financial Corporation Act and said GR has been communicated for needful actions vide circular under reference.
In light of provision under condition No.2(j) of Board's "Condition and Miscellaneous Charges For Supply of Electrical Energy", it is difficult for the field offices to extend the benefit of the said GR without referring the case to the appropriate authority.
The matter has been reviewed by the Competent Authority and it has been directed to adopt the following procedure:
1. The benefit of the aforesaid GR dated 7.2.2004 may be extended to the incoming successor/ occupier by following Page 14 of 17 HC-NIC Page 14 of 17 Created On Sat Aug 12 17:21:12 IST 2017 C/SCA/5071/2003 JUDGMENT normal procedures as per rules but without insisting for the payment against the old dues of the Board.
2. Simultaneously, actions for
(i) Pro-rata payment against the old dues shall be expedited with State Financial Corporation viz. GSFC/ GIIC concerned in accordance with the provisions of the GR and
(ii) All steps, including legal actions, for recovery of outstanding dues from the original consumer should be taken.
3. After all possible efforts/ process, if recovery from the old consumer seems not possible, then a proposal for waiver/ write off be processed for appropriate of the Competent Authority.
It is reiterated that the above benefit shall be extended to the applicant who has purchased the unit / property after the date of GR through auction from GSFC/ GIIC only and in all other cases, provisions of Board's condition no.2(j) should be strictly adhered to. Also please arrange to refund the deposited amount by successor, if any, for release/ reconnection by the successor, as an advance on account of receivable money from GSFC or GIIC against old dues of the Board after the date of GR i.e. after 7.2.2004."
22. As mentioned in the said circular, the matter in connection with the circular dated 7.2.2004 appears to have been reviewed by the competent authority and based on the decision of the competent authority, the company decided to adopt the procedure as mentioned therein, as per which the benefit of the circular dated 7.2.2004 was to be extended to the incoming successor/ occupier by following the normal procedure as per the rules but, without insisting for the payment against the old dues of the company. In view of the decision of the competent authority following which when the Circular dated 7.2.2004 is adopted by the company, the contention that the circular dated 7.2.2004 has no legal basis and cannot override the condition No.2(j) would be rendered without substance. The Court finds that when such is a decision of the company itself and when the petitioner could be said to have purchased the unit of the erstwhile consumer in auction held by GSFC subsequent to the circular dated 7.2.2004 of the Government, the company was not justified in demanding Page 15 of 17 HC-NIC Page 15 of 17 Created On Sat Aug 12 17:21:12 IST 2017 C/SCA/5071/2003 JUDGMENT payment of the outstanding dues of the erstwhile consumer from the petitioner for giving electric connection to the petitioner.
23. Learned advocate Ms. Bhaya however submitted that in any case the circular dated 7.2.2004 could not be read so as to give any benefit against the condition No.2(j) as after learned Single Judge allowed the petitions of the persons from whom recovery was insisted of past dues under condition No.2(j) vide order dated 19.6.2003, till the Letters Patent Appeals were allowed by this Court, there was no reason to come out with the policy by the Government to give any relaxation or benefit in the context of condition No.2(j). The Court however, finds that simply because learned Single Judge had allowed those petitions, is no ground to hold that the policy was not for giving benefits against payment of past dues of the erstwhile consumers by the auction purchasers. Reading the circular as it is, it clearly appears that the Government came out with the policy with clear intention to ensure that the auction purchasers of the units of the erstwhile consumers may not be insisted upon to clear the dues of such past consumers.
24. In such view of the matter, the third petition requires acceptance and the company is required to be ordered to refund the amount, deposited by the petitioner pursuant to the interim order made in the petition, to the petitioner.
25. In the result, the first petition, being Special Civil Application No.5071 of 2003, is dismissed, however with direction to the Electricity Company to refund the amount deposited by the petitioner if the company succeeds in recovering its past dues from the erstwhile consumer either through process of the suit filed by the company or through any other process. Rule is discharged. Interim relief, if any, stands vacated.
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C/SCA/5071/2003 JUDGMENT
26. The second petition, being Special Civil Application No.6015 of 2003, is allowed. It is held that the petitioners were entitled to have electric connection at the premises purchased in auction by them without payment of any electricity dues outstanding against the previous owner/ consumer. As could be seen from the interim order dated 28.4.2004, the petitioners were required to be given electric connection on petitioners filing undertaking before this Court that in the event, the petitioners lose in the petition, the petitioners shall pay the outstanding dues of electricity of erstwhile owner of the premises purchased by the petitioners. Now, since the petition is allowed, the petitioners are absolved from such undertaking and the electric connection to the petitioners shall not remain subjected to payment of any dues of the erstwhile consumer. Rule is made absolute.
27. Third petition, being Special Civil Application No.14766 of 2004 is allowed. The demand made by the company of outstanding dues of the erstwhile consumer from the petitioner for giving electric connection to the petitioner contained in the letter dated 21.8.2004 at Annexure-E is quashed and set aside. Consequently, the respondent No.2- the Company is directed to refund the amount paid by the petitioner under the interim order dated 25.3.2005 within a period of FOUR WEEKS from the date of receipt of this order. Rule is made absolute accordingly.
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(C.L.SONI, J.) Omkar Page 17 of 17 HC-NIC Page 17 of 17 Created On Sat Aug 12 17:21:12 IST 2017