Partly allowed

K. Lalitha, v. the Kerala State Electricity Board Ltd.

Kerala HC9 Jan 2023WP(C)/172/2023

Case brief

AI extract

What is this about?

This writ petition challenged an Electricity Ombudsman order directing the petitioner, a new auction purchaser, to pay energy arrears as a deposit under Section 40(3) of the Kerala Electricity Supply Code, 2014. The High Court modified the order.

What did the court decide?

The Ombudsman order is modified; petitioner directed to give security for arrears excluding interest instead of depositing the full revised demand.

K. Lalitha, Vs the Kerala State Electricity Board Ltd. — Banking and Recovery | Kerala HC (2023)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR. JUSTICE AMIT RAWAL

¶4

MONDAY, THE 9^TH DAY OF JANUARY 2023 / 19TH POUSHA, 1944

¶5

WP(C) NO. 172 OF 2023

¶6

PETITIONER:

¶7

K. LALITHA,
AGED 72 YEARS,
EXECUTIVE DIRECTOR,
ATTUKAL SHOPPING COMPLEX (PVT) LTD,
MALL MANAGEMENT OFFICE, SECOND FLOOR,
EAST FORT, THIRUVANANTHAPURAM.
PIN – 695023

¶8

BY ADVS.
M.R.ANANDAKUTTAN
M.HEMALATHA
MAHESH ANANDAKUTTAN
M.J.SAJITHA

¶9

RESPONDENTS:

¶10

1THE KERALA STATE ELECTRICITY BOARD LTD.,
VIDYUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM,
REPRESENTED BY THE CHAIRMAN AND
MANAGING DIRECTOR, PIN – 695004

¶11

2 DEPUTY CHIEF ENGINEER, ELECTRICAL CIRCLE, KSEB LTD, THIRUVANANTHAPURAM, THIRUVANANTHAPURAM DISTRICT. PIN – 695004

¶12

3SPECIAL OFFICER (REVENUE),
KSEB LTD., VYDYUTHI BHAVAN,
PATTOM, THIRUVANANTHAPURAM.
PIN – 695004

¶13

BY ADV.
SRI.B.PREMOD, KSEBL
SRI.ANTONY MUKKATH, SC, KSEB

¶14

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
09.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶15

WP(C) NO. 172 OF 2023 -2-

¶16

JUDGMENT

¶17

Petitioner has approached this Court through the present writ petition to challenge one of the decisions issued in the order dated 29.07.2022 of the Ombudsman i.e., Decision No.5, directing her to pay the energy charges as per the revised demand of licensee, as a deposit, in accordance with the provisions of Section 40(3) of the Kerala Electricity Supply Code, 2014.

¶18

Succinctly the facts in brief are that the predecessor of the petitioner was conducting a textile shop under the name and style M/s Ayyappa Textiles, near East Fort, Thiruvananthapuram. It was working in a building having an extent of 30.305 cents of property with 28,830 sq.feet of plinth area in re-survey numbers 665, 664/1-1, 666, 664/1 and 667/A2 Village Vanchiyoor. The aforementioned firm had applied for an electric connection and on observance of all the statutory formalities, the said connection was granted. The previous owner had also remitted a security deposit. The

¶19

WP(C) NO. 172 OF 2023 -3-

¶20

said textile availed a loan facility from the Dhanalakshmi Bank, but the account has been declared as a nonperforming asset on 30.09.2017. The Bank, as per the provisions under Sections 13 and 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act), taken over the possession of the properties and put the properties to auction. Petitioner was the successful participants in the aforementioned auction which was confirmed as per the letter dated 02.11.2019, in view thereof a sale deed on 07.03.2020 was executed. Bank also issued a separate letter to Thiruvananthapuram Corporation, Water Authority and Electricity Board for changing of the ownership in the name of the petitioner and for transfer of the amenities vide communication dated 25.11.2019 Ext.P1 and further re-iteration vide communication dated 13.10.2020 Ext.P2. The Electricity department disputed the letter of the Bank on the ground that it was not competent to transfer the security deposit

¶21

WP(C) NO. 172 OF 2023 -4-

¶22

attached to the electricity connection as per the provisions of Section 31 of the SARFAESI Act as it was exempted from the purview of the operation of said Act.

¶23

On 13.10.2020 an application for service connection was submitted to the first respondent and requested to transfer the ownership and adjust the security deposit, but the same was belatedly refused. At the time of taking of the possession of the premises by the Bank, the arrears in the electricity were of Rs.11,96,945/- (Rupees Eleven lakh ninety six thousand nine hundred and forty five only) effective from 2018 till the sale dated 07.03.2020. Learned counsel appearing on behalf of the petitioner submitted that the grievance of the petitioner was complained to the Consumer Grievance Redressal Forum (CGRF) but the same was rejected and against the order dated 28.09.2021 of the CGRF, an appeal was preferred before the Ombudsman bearing No.P-029/2022. Ombudsman vide order dated 29.07.2022 set aside the demand of the electricity and

¶24

WP(C) NO. 172 OF 2023 -5-

¶25

imposed the following conditions:

¶26

“ Decision:-

¶27

From the analysis done and the conclusions arrived at as detailed above, following decisions are hereby taken:

¶28

(1) The order of CGRF, Southern Region, Kottarakkara in OP No.51/2021 dated 2809-2021 is set aside.

¶29

(2) The demand notice of Licensee is quashed.

¶30

(3) The Licensee shall recover the arrears of the energy charges from the security deposit of registered owner of Licensee as per the records.

¶31

(4) The Contract Demand is deemed to be reduced with effect from 07-11-2020 and the Licensee has to send the revised demand to the appellant.

¶32

(5) The appellant shall pay the energy charges as per the revised demand of Licensee as a deposit as per Section 40(3) of Kerala Electricity Supply Code 2014.

¶33

(6) The appellant is liable to pay the security deposit for transferring the connection and execute fresh agreement.

¶34

WP(C) NO. 172 OF 2023 -6-

¶35

Having concluded and decided as above, it is ordered accordingly. No order on costs.”

¶36

It is contended that the petitioner is aggrieved

¶37

of condition No.5 for the reason that petitioner cannot be burdened to pay the revised demand of the licensee as the deposit as per the provisions of Section 40(3) of the Kerala Electricity Supply Code, 2014. Ombudsman ought to have noticed that the Electricity Board cannot return the security deposit nor can return it to the original customer. The only course open is to a djust the security deposit for the new comer having the same electric connection.

¶38

Issue notice before admission. Learned Standing Counsel for respondents accepts notice and submits that no cause of action has accrued the petitioner and the order is perfectly legal and justified and is in terms of the provisions of Sections 40(3), 143(3), 91, 99 and 100 of the Electricity Supply Code, 2014.

¶39

I have heard counsel for the parties and

¶40

WP(C) NO. 172 OF 2023 -7-

¶41

appraised the paper book.

¶42

Section 40 of the Electricity Supply Code, 2014 provides the recovery of arrears relating to the previous consumption, the same reads as under:

¶43

“ 40. Recovery of arrears relating to the previous consumer.- (1) The arrears of electricity charges and other liabilities if any, in the accounts of the previous consumer of any premises shall be recovered from such previous consumer of the premises, with whom the licensee has executed the service connection agreement, and not from the purchaser or lessee or occupier of the premises.

¶44

(2) The licensee shall, on disconnection of supply and dismantling of the service connection on account of arrears of electricity charges, determine the agreement with such consumer and shall forthwith initiate legal proceedings for recovery of arrears of electricity charges and other liabilities from such consumer and shall obtain necessary interim or final orders from the appropriate legal forum:

¶45

Provided that the amount of arrears of electricity charges and other liabilities finally recoverable from the consumer and the modus of recovery shall be in accordance with such interim or final orders of the appropriate legal forum.

¶46

WP(C) NO. 172 OF 2023 -8-

¶47

(3) If a purchaser or lessee or occupier of such premises requires a new connection, as the earlier connection given to the previous consumer in that premises has already been 19 disconnected and dismantled on the ground of outstanding dues of the previous consumer, new connection shall not be denied to such purchaser or lessee or occupier of the premises provided he furnishes a deposit which shall be equal to the arrears of electricity charges and other liabilities if any, excluding interest thereon, till the licensee obtains from the appropriate legal forum an order on the recovery of arrears and other liabilities or till the licensee settles the arrears and liabilities with the previous consumer or till completion of three years whichever is less:

¶48

Provided that on obtaining order from the appropriate legal forum on the recovery of such arrears of electricity charges and other liabilities, or on settlement of the arrears and liabilities by the licensee with previous consumer or on completion of three years as aforesaid, the licensee shall release the entire amount of deposit furnished by such owner or lessee or occupier of the premises, along with interest at bank rate as on the date of furnishing such deposit.”

¶49

No doubt, the learned Ombudsman by relying

¶50

WP(C) NO. 172 OF 2023 -9-

¶51

upon the other provisions found that the demand of the Electricity department by relying upon the provisions of the Electricity Supply Code, 2014 was wholly unjustified. But while ordering the new connection, had imposed the conditions strictly as per the proviso 2 of Section 40(3) of the Electricity Supply Code, 2014. There is no challenge to the vires of the aforementioned sections but the facts remains that the communication of the Electricity department do not reveal that whether any steps to recover the amount of arrears against the erstwhile owners had been taken, for, the proviso fixed the time line of three years and thereafter if the new licensee who complied with the provisions, is required to be refunded with amount of deposit.

¶52

In my view, a new applicant who had no fault and rather brought succor to the financial institution by purchasing the property in e-auction, cannot be burdened to first deposit the entire arrears and thereafter claim the refund. Accordingly, the order of

¶53

WP(C) NO. 172 OF 2023 -10-

¶54

the Ombudsman is modified. Petitioner is directed to give a security of the amount of the arrears of electricity charges and other liabilities, if any, excluding the interest for settlement of the arrears/liabilities or otherwise for a period of three years. In other words, Electricity department would not insist the petitioner to deposit the amount in the manner prescribed in proviso 2 of Section 40(3) of the Electricity Supply Code, 2014.

¶55

With the aforementioned modification writ petition stands disposed of.

¶56

Sd/-
AMIT RAWAL
JUDGE

¶57

¶58

WP(C) NO. 172 OF 2023 -11-

¶59

APPENDIX OF WP(C) 172/2023

¶60

PETITIONER EXHIBITS

¶61

Exhibit-P1TRUE COPY OF THE COMMUNICATION DATED
25-11-2019
Exhibit-P2TRUE COPY OF THE COMMUNICATION DATED
13-10-2020

¶62

Exhibit-P3TRUE COPY OF THE APPLICATION FOR
SERVICE CONNECTION DATED 13-10-2020

¶63

Exhibit-P4TRUE COPY OF THE ORDER OF THE STATE
ELECTRICITY OMBUDSMAN, KERALA DATED
29-07-2022

K. Lalitha, v. the Kerala State Electricity Board Ltd.

Case brief

What is this about?

What did the court decide?

K. Lalitha, v. the Kerala State Electricity Board Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

M.B.Sanil Kumar Vs State of Kerala

R.Prasad Vs the Deputy Tahsildar (Rr)

Baby Vs State of Kerala

Rasheeda Vs Kerala State Eletricity Board Limited

All Kerala Motor Driving School Instructors & Workers Association Vs Union of India

Internet Franchise Association (Ifa) Vs the Kerala State Electricity Board Limited