Allowed

Assam Power Distribution Co. Ltd. v. Mantri Tea Co. Pvt. Ltd. and Anr.

Gauhati HC3 May 2018WA/279/2017

Case brief

AI extract

What is this about?

Appeal against Single Judge order allowing restoration of electricity supply without demanding arrear dues from an auction purchaser of a liquidated tea estate. Division Bench held distributor must insist on payment before supply to protect right to recover dues, adhering to Stare Decisis principles.

What did the court decide?

Respondent directed to pay arrears of actual energy consumption charges till date of disconnection excluding surcharge within 3 weeks of bill receipt.

Assam Power Distribution Co. Ltd. Vs Mantri… — Pension and Retirement Benefits | Gauhati HC (2018)

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Page No.# 1/8

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GAHC010041332017

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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

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Case No. : WA 279/2017

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1:ASSAM POWER DISTRIBUTION CO. LTD.

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A SUCCESSOR CO. OF ERSTWHILE ASSAM STATE ELECTRICITY BOARD REPRESENTED BY ITS CHIEF GENERAL MANAGER D, BIJULEE BHAWAN, PALTAN BAZAR, GUWAHATI-781001

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VERSUS

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1:MANTRI TEA CO. PVT. LTD. and ANR.

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REPRESENTED BY ITS MANAGING DIRECTOR, SHRI DEVENDRA KUMAR MANTRI, CONTINENTAL CHAMBERS, 4TH FLOOR, 15A, HEMANTA BASU SARANI, KOLKATA 700001

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2:DEVENDRA KUMAR MANTRI S/O LATE GOVIND PRASAD MANTRI A PERMANENT RESIDENT OF KOLKATA WEST BENGAL AND MANAGING DIRECTOR OF PETITIONER NO. 1 HAVING ITS ADDRESS AT CONTINENTAL CHAMBERS 15A HEMANTA BASU SARANI KOLKATA 70000

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Advocate for the Petitioner : MR. D BHATTACHARYAMR.A.D.CHOUDHURY,S/C APDCL

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Advocate for the Respondent :

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Page No.# 2/8

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BEFORE HON’BLE THE CHIEF JUSTICE MR. AJIT SINGH HON’BLE MR. JUSTICE PRASANTA KUMAR DEKA

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Date : 03-05-2018

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JUDGMENT AND ORDER (ORAL)

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(P.K. Deka, J)

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Heard Mr. A.D. Choudhury, the learned Standing Counsel, Assam Power Distribution Co. Ltd. (APDCL) and Mr. S.K. Kejriwal, the learned counsel appearing on behalf of the respondents.

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This appeal is directed against the judgment and order dated 15.07.2013, passed in WP(C) No.5349/2006, by the learned Single Judge preferred by the respondent APDCL therein the said writ petition.

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The writ petitioners/respondents purchased Pathini Tea Estate in the district of Karimganj in auction sale while its erstwhile owner of the said tea estate namely, Tea Trading Co. Ltd. was in liquidation. The properties and assets of the said tea estate were put up for auction sale by the Official Liquidator appointed by the Calcutta High Court. The writ petitioners/respondents after filing Company Application in the said pending company petition deposited the entire amount and purchased the entire assets of the said tea estate. The said sale proceeding took place in the year 2006 and prior to that, the electricity supply to the said Pathini Tea Estate was disconnected on 04.12.2000 as the erstwhile owner failed to pay the bills raised against the consumption of electricity. The writ petitioners/respondents after purchasing the said tea estate, sought for restoration of the supply of electricity in the tea estate and vide letter dated 23.09.2006 the APDCL declined to restore the electricity supply unless the outstanding dues were cleared which comes to Rs.61 lakhs. Challenging the said action of the APDCL the writ petition was filed.

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The learned Single Judge by an interim order dated 08.11.2006, directed the appellant for providing fresh electricity connection to the writ petitioners/respondents without insisting

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Page No.# 3/8

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for the arrear payment referred herein above. Thereafter vide the impugned judgment and order dated 15.07.2013, allowed the writ petition thereby making the interim order dated 08.11.2006 absolute. It is pertinent to mention here that the appellant is the distribution licensee under the Electricity Act, 2003 and authorized to operate and maintain a distribution system for supplying electricity to its consumers. As per Section 82 of the Electricity Act, 2003, the Assam Electricity Regulatory Commission was constituted and as per Section 50, read with Section 181 of the Electricity Act, 2003, the State of Assam published the Assam Electricity Regulatory Commission (Electricity Supply Code and Related Matters), Regulation, 2004 (hereinafter referred to as the Supply Code) with its first amendment vide Gazette Notification dated 08.05.2007. The said Supply Code is in terms of Section 50 of the Electricity Act, 2003 satisfying the conditions to be followed for recovery of electricity charges, intervals for billing of electricity charges, disconnection of supply of electricity on nonpayment thereof, restoration of supply of electricity etc.

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The learned Single Judge, on the basis of the submissions of the parties to the writ petition, framed two issues for consideration which are as under:-

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Whether the petitioners who had purchased the assets and properties of the tea estate from another company in liquidation in auction from the Official Liquidator in a winding up proceeding in Court, would be liable to pay the outstanding electricity dues of the earlier owner?

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Whether the outstanding electricity dues of the tea estate standing in the name of the earlier owner have become barred by limitation?

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The learned Single Judge while deciding Issue No.1 took note of the various provisions including the Regulation 3.6.4 of the Supply Code. It was also held that the term “consumer” as per Regulation 1.3(vi) of the Supply Code has given an extended meaning beyond the meaning prescribed in the definition of the said term in the Electricity Act, 2003 and drawing reference of the term “consumer”, the learned Single Judge held that the provisions of the Supply Code cannot traverse beyond the Electricity Act, 2003 thereby bringing into existence substantive obligation or disability on such person who was not intended or contemplated by Electricity Act, 2003. Coming back to Regulation 3.6.4 of the Supply Code, the learned Single

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Judge held that in case of a person occupying a new property, it will be the obligation of that person to check the bills of the previous months or in case of disconnected supply, the amount due as per licensee’s record, immediately before occupation and ensure that all outstanding electricity dues as specified in the bills duly paid up and discharged subject to the limitation period as per sub-section 2 of Section 56 of the Electricity Act, 2003 and thereafter it was held that the said provisions will have to be interpreted and understood keeping in view the provisions of Electricity Act, 2003, particularly Section 2(15), 46 and 56 (2) thereof and not in isolation. Relying Isha Marbles v. Bihar State Electricity Board and another, reported in (1995) 2 SCC 648 wherein it was held that auction purchasers cannot be consumer till a contract is entered into and supplier cannot seek involvement of contractual liabilities against third party and thereafter relying Ahmadabad Electricity Co. Ltd. v. Gujarat Inns Private Ltd. and others, reported in (2004) 3 SCC 587 and some other decisions of the Hon’ble Apex Court and finally relying Special Officer, Commerce, North-Eastern Electricity Co. of Orissa (NESCO) and another v. Raghunath Paper Mills Private Ltd. and another in Civil appeal No.7899/2012 disposed of on 09.11.2012 (Manu/SC/0962/2012) held that requirement of Regulation 3.6.4 of the Supply Code would not be applicable to an auction purchaser from the Official Liquidator on an order of the High Court in winding up proceeding of a property earlier belonged to a company in liquidation having arrear electricity dues.

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While the learned Single Judge arrived at the said conclusion, the Division Bench decision of this Court in Carbon Resources Private Ltd. v. Assam Electricity Regulatory Commission as reported in 2010 (3) GLT 425 was held to be not applicable in the present facts and circumstances of the case.

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Mr. Choudhury submits that the term “consumer” under the Regulation 1.3(vi) of the Supply Code includes person who applied for electricity connection and whose supply has not yet commenced, connections have been provided or whose electricity supply has been disconnected for nonpayment of dues etc., whose connecting service lines/electrical apparatus has not been physically dismantled. Referring to Regulations 3.6.3 and 3.6.4 of the Supply Code, Mr. Choudhury submits that as the term “consumer” is wide enough to include the respondents in the present factual matrix, the request for supply of electricity to the tea estate of the petitioners/respondents was not entertained by the present appellant until the

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dues are paid in full as person occupying a new property will be under the obligation to check the bills for the previous months or in case of disconnected supply, the amount due as per record of the appellant immediately before his occupation and ensure that all outstanding electricity dues are paid up and discharged subject to limitation as per sub-section 2 of Section 56 of the Electricity Act, 2003. But no sum due from any consumer shall be recoverable after the period of two years from the date when such sum becomes first due unless such sum has been shown continuously as recoverable as arrear of charge for electricity supply and licensee (appellant) does not disconnect the supply of electricity. Mr. Choudhury submits that the said bar referred under section 56 (2) of the Electricity Act, 2003 is for realization of the said amount by way of filing suit. It is also submitted that Regulation 3.6.4 of the Supply Code empowers the appellant to insist upon clearance of arrear dues and in support of his contention relies Carbon Resources Private Ltd. (supra.) . It is submitted that the issue involved in the said Division Bench decision of this Court is whether the petitioner as an auction purchaser is obliged to clear electricity dues of the previous consumer before he can be supplied electricity in the premises where connection was disconnected for nonpayment of power dues. Therein, it was held, keeping in view the Regulation 3.6.4 that since conditions have been prescribed for making supply to a premises where electricity has been disconnected for nonpayment of dues, the distributor cannot be compelled to give electricity connection in the same premises without insisting for arrear amount as the same would affect adversely the right to recover the outstanding dues and the same cannot certainly be in public interest. It is further stated that while arriving at the said conclusion the Division Bench of this Court took note of almost all the decisions of the Apex Court referred by the learned Single Judge. Accordingly, he submits that the learned Single Judge ought to have considered the views of the Division Bench of this Court and ought not have allowed the writ petition permitting to enjoy the electricity connection without paying arrear outstanding dues of the previous owner.

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Mr. Kejriwal, on the other hand, submits that Section 56(2) of the Electricity Act, 2003 is clear and specific inasmuch as even if Regulation 3.6.4 of the Supply Code is taken into consideration but the appellant had already disconnected the electricity supply to the tea estate which is very much apparent from the electricity bills raised by them and moreover the

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dues so claimed by the appellant are beyond two years period and as such the appellants are not entitled to make the said demand nor the writ petitioners/respondents are liable to pay the said arrear outstanding.

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We have considered the submissions of the learned counsel. The learned Single Judge framed 2 (two) issues and while deciding the writ petition, did not give his finding with respect to the Issue No.2, after deciding the Issue No.1 and as such we confine our findings with respect to the Issue No.1 only. We have gone through the provisions of the Supply Code referred in the decision of the Division Bench in Carbon Resources Private Ltd. (supra.) which stands on similar footing as that of the present factual matrix in this present appeal. The Division Bench held that as Supply Code is required to provide for recoverable of electricity charges, the said Regulation and the Clauses contained therein cannot be said to be ultra vires the provisions of the Electricity Act, 2003 and the same is not the excessive exercise of the power by a delegatee and thereafter held as follows:-

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“Since conditions have been prescribed for making supply to a premises where electricity has been disconnected for non-payment of the dues, it would be unjust in our view to compel the Distributor to give electricity connection at the same premises as the Distributors rights to recover outstanding dues would then be adversely impacted. This cannot certainly be in public interest and we are unable to accept the argument of the petitioner on this count.”

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The learned Single Judge as referred herein above took note of the findings arrived at by the Division Bench of this Court but even then held that the requirement of Regulation 3.6.4 of the Supply Code would not be applicable to an auction purchaser of a property earlier belonged to a company on liquidation having any arrear electricity dues, from the Official Liquidator on order of the High Court in a winding proceeding.

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In our opinion, the decision in Carbon Resources Private Ltd. (supra.) was decided which involved the similar issue as that we are facing in the present appeal. The finding of the Division Bench has not yet been set aside. Under the Stare Decisis Rule , a principle of law which has become settled by a series of decisions generally is binding on the courts and should be followed in similar cases. This rule is based on expediency and public policy, and

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although generally it should strictly adhered by the Court.

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In Mishri Lal (Dead) by Lrs. Vs Dhirendra Nath (Dead) by Lrs. And Ors. , reported in AIR 1999 SC 2286, the Hob’ble Apex Court accepted the view in Maktul v. Mst. Manbhari and Ors ., reported in 1959 SCR 1099 explaining the scope of doctrine of stare decisis with reference to Halsbury’s Laws of England and Corpus Juris Secundum and held as follows which is reproduced herein below:

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“12. this Court in Muktul v. Mst. Manbhari & Ors. (1959 SCR 1099), explained the scope of the doctrine of stare decisis with reference to Halsbury's Laws of England and Corpus Juris Secundum in the manner following:-

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The principles of `Stare Decisis' is thus stated in Halsbury's Laws of England:

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"Apart from any question as to the Courts being of co-ordinate jurisdiction, a decision which has been followed for a long period of time, and has been acted upon by persons in the formation of contracts or in the disposition of their property, or in the general conduct of affairs, or in legal procedure or in other ways, will generally be followed by courts of higher authority than the court establishing the rule, even though the court before whom the matter arises afterwards might not have given the same decision had the question come before it originally. But the supreme appellate Court will not shrink from overruling a decision, or series of decisions, which establish a doctrine plainly outside the statute and outside the common law, when no title and no contract will be shaken, no persons can complain, and no general course of dealing be altered by the remedy of a mistake".

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The same doctrine is thus explained in Corpus Juris Secundum:-

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Under the stare decisis rule, a principle of law which has become settled by a series of decisions generally is binding on the courts and should be followed in similar cases. This rule is based on expediency and public policy, and, although generally it should be strictly adhered to by the courts, it is not universally applicable.

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Be it noted however that Corpus Juris Secundum, adds a rider that "previous decisions should not be followed to the extent that grievous wrong may result; and, accordingly, the courts ordinarily will not adhere to a rule or principle established by previous decisions which they are convinced is erroneous. The rule of stare decisis is

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not so imperative or inflexible as to preclude a departure therefrom in any case, but its application must be determined in each case by the discretion of the court, and previous decisions should not be followed to the extent that error may be perpetuated and grievous wrong may result."

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The statement though deserves serious consideration in the event of a definite finding as to the perpetration of a grave wrong but that by itself does not denude the time tested doctrine of Stare Decisis its efficacy. Taking recourse to the doctrine would be an imperative necessity to avoid uncertainty and confusion. The basic feature of law is its certainty and in the event of there being uncertainty as regards the state of law - the society would be in utter confusion resultant effect of which would bring about a situation of chaos - a situation which ought always to be avoided.”

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Keeping in view the said ratio, the finding of the learned Single Judge that the requirement of Regulation 3.6.4 of the Supply Code could not be applicable to an auction purchaser of a property cannot be accepted and as a result, we are of the opinion that the judgement passed by the learned Single Judge is liable to be interfered which we accordingly do to the extent that the respondents shall pay arrears of actual energy consumption charges till the date of disconnection leaving aside the surcharge. The bill in this regard will be issued to the respondent within 3 (three) weeks from today who shall then deposit the amount within 3 (three) weeks from the date of receipt of the bill. We have consciously set aside the demand for surcharge against the respondents because the respondent No.1 is a bonafide purchaser of the tea estate which was in liquidation.

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Accordingly, this writ petition is disposed of.

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JUDGE CHIEF JUSTICE

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Comparing Assistant

Assam Power Distribution Co. Ltd. v. Mantri Tea Co. Pvt. Ltd. and Anr.

Case brief

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Assam Power Distribution Co. Ltd. v. Mantri Tea Co. Pvt. Ltd. and Anr.

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