Allowed

M/s. Balaji Pulvarisers, S.C.No.6687 v. A.P. Central Power Distribution Company Ltd.

Telangana HC9 Nov 2010WP/11553/2005

Case brief

AI extract

What is this about?

In a writ petition, this Court allowed the petitioner's challenge against a demand notice for alleged electricity arrears spanning over 13 years. The Court set aside the bill, holding it violated the limitation period under Section 56(2) of the Electricity Act, 2003 and relied on Isha Marbles to exempt the new owner from previous dues.

What did the court decide?

The impugned demand notice was set aside and the writ petition was allowed with no order as to costs.

M/s. Balaji Pulvarisers, S.C.No.6687 Vs A.P… — Service and Employment | Telangana HC (2010)

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THE HON’BLE SRI JUSTICE C.V.RAMULU

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W.P.No.11553 of 2005

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ORAL ORDER:

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This writ petition is filed seeking a Mandamus declaring the impugned Bill dated 1.5.2005 for the month of April 2005 issued by third respondent towards alleged arrears of consumption charges/minimum charges for the period from January 1992 to April 2005 as arbitrary, illegal and unenforceable and consequently set aside the same and direct the respondents to refund the amounts already paid by the petitioner.

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It appears, in pursuance of the tender notification issued by A.P. State Financial Corporation (APSFC) under Section 29 of State Financial Corporation A1ct, petitioner participated in the tender and purchased a sick unit namely M/s Sree Vidya Plastics, IDA, Plot No.45, Bhongir, Nalgonda district from APSFC and sale deed was executed in favour of petitioner on 15.11.2003. When the petitioner commenced the unit and requested the respondents for restoration of power supply to Service Connection No.6687, he was issued with a demand notice for Rs.40,802/- purported to be arrears of the previous owner against the said unit upto December 2004. However, petitioner paid the said amount and after paying the same, power supply was restored from January 2005. Thereafter, petitioner was issued with the present impugned demand notice demanding to pay a sum of Rs.1,00,257/- purported to be arrears from January 1992 to April 2005. Hence this writ petition.

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This Court, while admitting the writ petition on 24.5.2005, directed the respondents to restore the power supply subject to condition of petitioner depositing half of the amount as per the bill dated 1.5.2005 within a period of four weeks, subject to the final result

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in the writ petition.

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There is no dispute as to depositing of half of the amount as directed by this Court. The learned counsel for petitioner states that firstly no reasons were furnished for raising such demand purported to be arrears from January 1992 to April 2005, in spite of collecting Rs.40,802/- earlier towards arrears; and secondly the impugned demand notice is issued beyond the period of limitation in view of Section 56(2) of Electricity Act, 2003. Apart from that, the Apex Court i n ISHA MARBLES v. BIHAR STATE ELECTRIICTY BOARD^[1] also held that auction purchaser of the premises would not be liable to meet the liability of the previous consumer in order to secure reconnection.

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Per contra, the learned counsel appearing for respondents submitted that the question of furnishing details does not arise. Since the petitioner is continuously receiving power supply in the name of previous owner, may be, he might have purchased the unit from APSFC, that itself does not absolve him from paying arrears, since he is getting power supply in the name of previous owner. The judgment in ISHA MARBBLES’s case has no application to the facts of the present case. Further, there is an amendment in the terms and conditions of the agreement, as per which, petitioner is liable to be pay even the dues of the previous owner. In support of his case, the learned counsel for respondents relied on the judgment in PASCHIMANCHAL VIDYUT VITRAN NIGAM LTD. v. DVS STEELS AND ALLOYS PVT. LTD .^[2] . The learned counsel also relied on Clause 8.4 of terms and conditions of supply, which reads as under:

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“Transfer of service connection: The seller of the property should clear all the dues to the company before selling such property. If the seller do not clear the dues as mentioned above, the company may refuse to supply electricity to the premises through the already existing connection or refuse to give a new connection to the premises till all dues to the

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company are cleared”.

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and submitted that the dues in regard to the electricity supplied to the premises should be cleared before electricity supply is restored.

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I have given my earnest consideration to the respective submissions made by the learned counsel on either side and perused the impugned notice and other material made available on record.

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At the outset, it may be necessary to notice paragraphs 55 to 57 of the judgment in ISHA MARBLES v. BIHAR STATE ELECTRIICTY BOARD

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(1 supra), which reads as under:

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55. In all the present cases the supply of electricity to a particular premises which had the benefit of enjoying electricity had been disconnected under Section 24 of the Electricity Act. The auction purchasers want reconnection. The Board says no; unless and until the consumption charges in relation to that property which came to be incurred during the A ownership of the previous incumbent are cleared off. Is the stand of the Board correct? The High Court, in the main judgment in Suman Packaging (C.W.J.C. No. 5358 of 1992) gives the following reasons for answering the question against the Board:

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1. Section 24 stipulates discontinuance of supply of electrical energy to the consumer in respect of a sum due from him. We are afraid the High Court had not read Section 24 in conjunction with other statutory provisions though they had been noted, namely, Section 26 of the Supply Act; Section 21 of the Electricity Act and Clause VI of Schedule of the Electricity Act. They clearly postulate the obligation to supply energy for C such premises. At the risk of repetition we hold the premises had enjoyed the benefit of electricity. The owner of the premises or even the occupier of the premises, as stated under Rule 2 (af) of the Indian Electricity Rules, becomes liable to pay the consumption charges together with other dues. In other words, the liability is in

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respect of the dues of electricity which D came to be supplied pursuant to the contract with the former owner. The discharge of such liability will be on such owner or occupier.

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56. From the above it is clear, the High Court has chosen to construe Section 24 of the Electricity Act correctly. There is no charge over the property. Where that premises comes to be owned or occupied by the auction purchaser, when such purchaser seeks supply of electric energy he cannot be called upon to clear the past arrears as a condition precedent to supply. What matters is the contract entered into by the erstwhile consumer with the Board. The Board cannot seek the enforcement of contractual liability against the third party. Of course, the bona fides of the sale may not be relevant.

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57. The form of requisition relating to the contract is in Annexure VIII prescribed under Clause VI, of the Schedule to the Electricity Act. They cannot make the auction purchaser liable. In the case of Isha Marbles we have already extracted the relevant clause wherein the consumer was asked to state his willingness to clear off the arrears to which the answer was in the negative. Therefore, the High Court has rightly held that the auction purchaser, namely, "the writ petitioner before us is ready and willing to enter into a new contract that the auction purchaser does not intend to obtain the continuance of supply of electrical energy on the basis of the old agreement". It is true that it was the same premises to which reconnection is to be given. Otherwise, with the change of every ownership new connections have to be issued does not appear to be the correct line of approach as such a situation is brought about by the inaction of the Electricity Board in not recovering the arrears as and when they fall due or not providing itself by adequate deposits”.

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It is also necessary to notice Clause (2) of Section 56 of Electricity Act 2003, which reads as under:

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“Notwithstanding anything contained in any other law for the time being in force, no sum due from any consumer, under this section shall be recoverable after the period of two years from the date when such sum became first due unless

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such sum has been shown continuously as recoverable as arrear of charges for electricity supplied and the licensee shall not cut off the supply of the electricity.”

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Apart from the above, neither any show cause notice nor any reasons were furnished for raising the present demand. On the other hand, a reading of the Bill discloses that there are no arrears for long time and how these arrears crept up overnight is not known. The impugned demand of Rs.1,00,257/- is in furtherance to the earlier demand of Rs.40,802/- which was paid by the petitioner at the time when he requested for restoration of power supply immediately after purchase of the unit. Further, Section 56(2) of the Act contemplates that no demand shall be made after more than two years from the date it is payable and unless and until they are continuously mentioned as arrears in the previous bills. In the impugned notice, no such mention is made. Therefore, it must be deemed that the present demand is raised beyond the period of limitation. Insofar as the judgment relied upon by the learned counsel for respondents in PASCHIMANCHAL VIDYUT VITRAN NIGAM LTD. v. DVS STEELS AND ALLOYS PVT. LTD (2 supra) is concerned, unless and until there is a clause in the terms and conditions of supply, the respondents could not have raised such demand. Insofar as Clause 8.4 is concerned, admittedly, it has come into force with effect from 6.1.2006. Therefore, clause 8.4 is not applicable to the present case, since the very demand is from January 1992 to April 2005. As of today, no agreement has been entered between the parties and even otherwise, the respondents have admitted that the power supply is being made in the name of previous owner.

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For all the above reasons, I am of the opinion that the impugned notice is liable to be set aside and is accordingly set aside. However, this will not preclude the respondents from making demand, if any, as

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per law.

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The writ petition is accordingly allowed. No order as to costs.

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______________ C.V.RAMULU, J

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Date: 9.11.2010 DA

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THE HON’BLE SRI JUSTICE C.V.RAMULU

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W.P.No.11553 of 2005