Allowed

Susheel Kumar Agarwal and another v. The Southern Power Distribution Company Of Telangana State

Telangana HC21 Apr 2023WP/30913/2022

Case brief

AI extract

What is this about?

The High Court allowed the petition, setting aside a DISCOM notice to disconnect power. The Court held that dues barred by the two-year limitation under the Electricity Act or not claimed during official liquidation cannot be recovered from subsequent purchasers.

What did the court decide?

The impugned demand notice issued by the respondents is set aside and the writ petition is allowed without costs.

Susheel Kumar Agarwal and another Vs The Southern… — Writ and Judicial Review | Telangana HC (2023)

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132',t91

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HIGH COURT FOR^{THE STATE OF TELANGANA} AT HYDERABAD (Special Original Jurisdiction)

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FRIDAY, THE TWENTY FIRST DAY OF^APRIL TWO THOUSAND AND TWENTY THREE

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PRESENT

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THE HONOURABLE SMT JUSTICE P.MADHAVI DEVI

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WRIT PETITION NO: 30913 OF 2022

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Between:

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Susheel Kumar Agarwal, S/o J.C. Agarwal, Aged 45^years, Occ. Business, No.1-8-2151218, Park Avenue Colony, P.G.Road, Secunderabad. SC.No.013203267.

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Shyam Sunder Bansal, S/o S.N. Bansal, Aged 58^years, Occ. Business, Rl/o 2-3-540113 and 14, D.V.Colony, Secunderabad. SC.No.0'13202891 .

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M/s KDA lspath Pvt., Ltd., Rep. by its Director, Pavan Kumar Agarwal, Sio J.C. Agarwal, Aged 50 years, Occ. Business, F/o. 1-8-2151218, Sikh village, Secunderabad. SC.No. 1 3203932.

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M/s Ansh Constructions a firm, rep. by its Partner Satish Kumar Agarwal, S/o Rajendra Prasad Agarwal, aged 40 dears, Occ. Business, Rio H.No.9-4861'lTS,Salarjung Colony, Hyderabad. SC.N0.013202891.

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M/s Ch.Gouri Shankar lnfra Build (lndia) Pvt., Ltd., Rep. by Ch. Gouri Shankar S/o Bhaskar Rao, Aged about 60 years, Occ. Business. R o Plot NO.820, Bhagat Singh Nagar, Kukapalli, Hyderabad SC.No.020103908

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...PETITIONERS

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AND

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The Southern Power Distribution Company Of Telangana State, Mint Compound Hyderabad. rep. by its Chairman and Managing Director.

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The Superintending Engineer, TSSPDCL, Operation Circle, Medchal, Gun Rock, Secunderabad.

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...RESPONDENTS

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Petition Under Article 226 of the Constitution of lndia^praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ in the nature of a Writ of Mandamus or any other appropriate writ direction, order or orders declaring. the action of the respondents in trying to disconnect the^power supply to the^petitioners services as wholly arbitrary, illegal Violative Article 14, 19 (1) G and 21 of the Constitution of lndia without^jurisdiction and void and consequently set aside the notice in Lr. NO. S. C./OP/MCL/SAO/AAO/HT/JAO/HT/D.^{N0.1 6 1, dated20I 0212021 .}

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lA NO: 1 OF 2022

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Petition under Section 151 cPC^{praying that in the circumstances statedin} the affidavit filed in support^{of the petition, the Highcourt maybe pleased to} direct the respondents not to^{disconnectthe power supply to the petitioner's} services.

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l.A.NO:2 OF 2022

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Between

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The Southern Power Distribution^{CompanyOf Telangana State, Mint} Compound Hyderabad.^{rep. by its Chairmanand Managing Director'}

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The Superintending^{Engineer, TSSPDCL, OperationCircle' Medchal'Gun} Rock, Secunderabad.

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.....PETITIONERS/RESPONDENTS

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AND

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Susheel Kumar Agaruval,^{S/oJ C Agarwal, Aged} ^45^{years,Occ Business'} No.1-8-2151218,^- Park^{Avenue Colony,P G Road' SecunderaDad'} SC. No.0'1 3203267

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2 Shvam Sunder Bansal, S/o S.N.^{Bansal,Aged 58 years, Occ Business,Fl'/o}

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i-i-iqont and 14, D.V.Colony, Secunderabad. SC No 013202891 '

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M/s KDA lspath^{Pvt., Ltd., Rep. by its Director-..PavanKumar Agarwal,S/o}

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J.C. ns"*i, Aged 50 years, Occ. Business, Ril' 1-8-2151218, Sikh village' Secunderabad. SC.No.^{1 3203932.}

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M/s Ansh Constructions^{a firm, rep. by its PartnerSatish Kumar A9![!l'} ^Si9 Raiendra Prasad Aqarwal,^{aqed 40'dears, Occ' Business'Rio H No 9-4-} AAi I ft , Salariung^{Co-lony,Hyd-erabad. SC. N0.0'13202891'}

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M/s Ch.Gouri Shankar^{lnfra Build (lndia) Pvt., Ltd', Rep} !Y^{Cir' Gouri^S^hankar} - S7" aniskjr Rao, Aged about 60 years' Occ- Business R o Plot NO'820' Bfragat Singh Nagarl^{Kukapalli,HiderabadSC.No.020103908'}

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....PETITIONER/RESPONDENT

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Petition Under section^{'1 51 CPC prayingthat in the circumstancesstated} in the affidavit filed^{in supportof the petition, the Highcourt maybe pleasedto} vacate the interim orders^{daled 2\to7 t2022 in wP No 309',1 3 0f 2022 and dismiss} the writ petition.

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Counsel for the Petitioners^{: SRl.ERlGlGANESH}

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Counsel for the Respondents^{: SRI.R.VINOD REDDY}

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The Court made the following ORDER

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THE HONOURABLE SMT JUSTICE^{P.MADHAVIDEVI}

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W.P.No. 3O9L3 of 2o22

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ORDER:

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In this writ petition, the petitioner is seeking a writ^of mandamus declaring the action of the^respondents in^{trying to} disconnect the power supply to the petitioner^premises, as illegal, arbitrary and unconstitutional and without^jurisdiction and consequently to set aside the notice dated 20.O2.2O21 and to pass such other order or order.

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Brief facts leading to the filing of the present writ petition are that the High Court of Andhra Pradesh in RCC No.6 of 1994 had passed an order dated 23.04.1996 winding up the company by name R.G.Foundry Forge Limited. Consequently, the official Iiqurdator of High Court of Andhra Pradesh took possession of the properties and invited the sealed tenders for two lots of properties. The hrst lot was land of 32383 sq.meters with buildings in Survey No.42, IDA, Shapurnagar, Jeedimetla and the sccond lot was plant and machinery. One Mr.K.C.Venkateswarlu and others were declared as the highest bidders in the public auction for the first lot and the Hon'ble High Court by order dated 10.10.2002 conhrmed the sale.

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PMD*' w.P.No- 3o9 t3 oJ 2OZ2

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However, some proble rn zrrose with regard to the extent ol land sold and after rcsolving the same, the auction purchasers agreed to sell the land to the writ petitioner and that on an application filed by thc auction purchaser, the Court by order dated 16.09.2OO5 permlttcd the official liquidator to execute sale deeds in favour of the petitioners No. 1 & 2 and one Agarwal Developers <tn 07.O2.2OO7. The respondents did not make any claim before the official liqr_ridator at any point of time.

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M/s.Agaru,al Developers, who has purchased 34,O37.26 sq.yards lrom ofhcial liquidator had sold:

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(i) 7085 sq,yards undcr AGpA daed t2.O3.2OO7 ro M/ s.Ansh Constructions;

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(ii) 4513 sq.yards under registered AGpA ro M/s.KDA Ispat Privatc Limitecl; and rl,re balance ol 22439.26 sq.yards was retained and was mortgagcd to SBI as a security for the loan availed by it. The asset was, however, declared as NpA and the bank auctioned the land on 29.05.2019 and one M/s.Ch.Gowri Shankar Inlra Build (lndia) private Limited was declared as the successful bidder and thc sale was confirmed and sale certificate also was issued.

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PIdD,J w.P.No. 3o9 13 of2022

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M/s.Ch.Gowri Shankar Infra Build^{(lndia)PrivateLimited} in-turn, sold the land in^pieces to different^{personsi.e., M/s.Om} Rool-rng Industries, Ganesh Kumar Agarwal, Gampa Amarpal, M / s.Global infratech & Rakesh Agarwal and retained some portion with it.

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The petitioner, on the other hand had constructed a godown and has leased it out to third parties, who have obtained electric service connection for 5KW under Service No.0132O3267 and M/s.Shyam Sundar Bansal i.e., the Petitioner No.2 was doing steel business from his premises and he has obtained electric supply connection for 20KW under Service No.0i3202993 and M/s.Ansh Construction was maintaining a weighbridge and they have obtained power connection of 5KW under Service No.OI320289 1.

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It is submitted by the learned counsel for the petitioner that the Superintendent Engineer i.e., respondent No.2 herein, issued a notice to one of the individual service connection holders stating that the H.T.Service Connection No.MCL-242 of M/s.R.G.Foundry was terminated due to non-payment of elcctricity dues of an amount of Rs.2,05,71,192/- including surcharge as on 13.12.2021 and that the services was

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PMD,J w.P.No. 3o913 of 2022

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terminated as per clausc 4.g.1 of Electricity Supply Code and Proceedings undcr Rcvenrrc Recovery Act was initiatcd. It was also informed that [he service connection No.L.T.S.C. 020103905 in thc narne ol'M/s.Gowri Shankar Infra B located in Survey No.42, Shapurnagar is the link serwicc of M/s.R.G.Foundry Forge Lirnited and that the Hon,ble Supreme Court in Civit Appeal No. 1815 of 2O2O has held that rhc DISCOM has right to collect the previous owners due from the purchaser and thcrefore. M/s.Gowri Shankar Infra has to pay Rs.2,O5,71,192/- r.r.ithin 15 days there from, failing which its services u,ill be disconnectcd as per clause 4.g.1 of Electricity Supply Code. Sincc thc sirrne was brought to the notice of the petitioners, the petitioners have l-rled the present writ petition.

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Learnerl Senior colrnsel appearing for the petitioners submitted th;rt thc demand notice issuecl by the respondents vide letter dared 20.12.2021 is not sustainable on the grounds that:

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(i) the demand is barrcd by limitation under Section 56(2) of the Electricr ty AcU

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PMD,J w.P.No. 30913 o! 2022

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(ii) the service connection No. L.T.S.C.^{020103905is not} link service of H.T.S.C.No.MCL-242^{of M/s.R.G.FoundryForge} Limited;

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(iii) the respondents have not raised this demand^before the ofhcial liquidator at^{any point of time during the liquidation} oi proceedings.

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Learned counsel for the petitioner submitted that^the transaction of^purchase o[ Iand^{is not betweenany two private} persons, but it is in the Court monitored sale by the official tiquidator of the Hon'ble High Court after public notice. [t is submitted that the respondents failed to make any claim before the ofhcial liquidator about the dues of M/s.R.G.Foundry Forge Limited and therefore, the petitioners herein were not in the knowledge of the dues of the erstwhile owners of the^property. He further submitted that the official respondents that the demand raised in the year 2O2l witlr, regard to the^possible dues prior to 20O2, cannot be raised in the year 2O2l as it is barred by limitation under Section 56(2) of the Electricity Act.^Further he also argued that the respondent No.S are^{no way connected} to the M/s.R.G.Foundry Forge Limited and therefore, it^cannot be categorized as Iink service provider and therefore^the

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PMD,J W.P.No- 3O913 of 2022

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judgment of the Hon,blc Supreme Courl on wl-rich reliance has been placed for issuing thc demand notice is not applicable to the facts of the case.

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Learned Standing counsel for the respondents relicd upon the averments made in thr: r:ounter affidavit filed along with stay vacate petition and submrttccl that under clause 5.g.4.3 0f the General Terms and Conclirions of Supply Distribution and Retail Supply, the respondcnts hacl the power to disconnect the supply of a consumer for non prryrnent of any amount duc lo the company on any accounr altcr the period specified therein i.e., four months. It is submittecl erlter termination of agreement with the consumt:r and dismantling the meters, tlte respondents cannot raise a,y bill u,der .onsumer. However, he submitted that the Hon'ble Supreme Cotrrt in the case of Telangaaa State Southern Power Distribution Company Limited and Another Vs. Srigdhaa Beveragesr has held that the electricity dues are statutory in character under Lhe Electricity Act and as per the terms & conditions of supply. they cannot be waived and cannot partake the character of ducs of purely contractual nature and therefore, the Electncity Dcparlment can demand the arrears

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\ (2ozo) 6 scc qo,r

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PMD,J W.P.No. 3O973 of 2022

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due of the last owner,^{from the respondentspurchaser.It is} submitted that in view of the^{above judgment,the demand} notice raised by the respondents^{is valid and writ petition hasto} be dismissed with cost.

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Learned counsel for the^petitioner, in^{rebuttal, submitted} that the respondents have never raised any demand^{with regard} to the dues of M/s.R.G.Foundry Forge Limited and have^never raised objections before the official liquidator earlier. He^also submitted that the in the case of Rajani Ginaing & Pressing Factory, Adilabad, this Court in W.P.No.21779 of 2Ol2 vid'e orders dated 26.09.2012 has held that unless the licensee continues to show the disputed amount under Lhe bills raised within two years from the date when the alleged amount feli due, it cannot be recovered from its consumer and therefore such demand after two years is barred by limitation as prescribed under Section 56(2) of the Act. He also referred to the decision of this Court in W.P.No.11676 of 2007 wherein under simiiar circumstances, this Court has held that the bills raised after a period of two years from the due date, cannot be recovered as they are barred by limitation under the Electricity Act. He relied upon Lhe decision of the Hon'ble High Court of

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PMD,J tv.P No_ 3O913 of 2022

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Andhra Pradesh at Amaravathi in W.p.Nos.2 7642 and 29048 of 2027 , dated 20 .O4.2O2.2 ,.r,hcrein the Court has follou,ed the decision of the Hon'blt: Suprcme court of India in the case o[ Ghanashyam Mishra and Sons private Limited Vs. Edelweiss Asset Reconstruction Company Limited and Anothe12 wherein it u,as held that on the date of approval of resolution plan by thc adjudicating authority, all claims whrch are not part of the resoh_rtion plan shall stand extinguished and no person shall be entitled to ir.ritiarc or continue any proceedings in respect of the claim which is nol a part of the rcsolution plan. The Court has thus, helcl that the claim o[ Lhe electricity department which is nor part of the resolution plan shall stand extinguished and no person will be entitled to initiate or continue in respect o[ the t:l:rim which is not the part of the resolution plan.

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karned Shnding counscl submitted that the respondents have approached the official tiquidator on 24.10.1997 vide Letter No. SC,/ OP/ RRD / SAO / HT_[t/ D.No.644, to settle the electricity dues amount of Rs.33,46,269 /_ pending after termination of agreement on 06.o2.r994 against the RRN242 of

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2 (2021)9 scc 657

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PIITD,J w.P.No. 3O9r3 of 2022

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M/s.R.G.Foundry Forge Limited and also the copies of the agreement and other documents were also submitted as requested by the ofhcial liquidator of Hon'ble High Court of Andhra Pradesh. It is submitted that the company again requested the official liquidator in various letters from time to time the latest being 21.O3.2022 for settlement of outstanding dues, but there was no progress and the claim in Form-66 as requested by the office of the official liquidator was also submitted vide letter dated 18.08.2022. He has drawn the attention of this Court to Form-66 filed before the official liquidator on 18.O8.2022 .

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As regards the Hon'ble Supreme Court judgment on which the respondents have placed reliance upon, the learned counsel for the petitioner submitted that the issue of limitation was not before the Hon'ble Supreme Court and the Hon,ble Supreme Court, in fact, has held that in that case, there existed a clause in the sale deed that the Iiability of the vendor is taken over by the purchaser. It is submitted that therefore the decision of the Hon'ble Supreme Court is distinguishable on lacts from the facts of the present case and therefore it cannot be applied to the case on hand.

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PMD.J w.P.No. 3O913 oJ 2022

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Having regard to the rival contentions ancj the material on record, this Court linds that the Hon,ble Supreme Court in the case of Telangana State Southern power Distribution Company Limited and Another Vs. Srigdhaa Beverages (crted supra), has held thal the electricity dues are shtutory in character and therefore the-. cannot be waived and they can be recovered under the Revenuc Recovery Act. The rcspondents have raised the demand after the lapse of two years as prescribed under Section 56 (2) of the Electricity Act. For rhe sake of ready referencc, the relevant provision is reproduced here under:

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Section S6: (Disconnection o.f supplg in default oJ pagment): (1 1^.*.. (2) Notuithstanding ongthing contained ln any other ltul for the time bein g in force, no sLtnl due from anA consumer, under this section shall be recouerable afier the period of huo yeors from the date tuhen such sum became fi.rst due unless such sum has been shoutrt continuouslg as recouerable os arreers of charges for electricitg suppLied and the ltcensee shalt iot .ut'o1J ii" supplg of the etectncitg.

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Thus, though the respondents have the authoritv to recover the dues of the previous owner from thc existing owner or to deny fresh connection to the purchaser, r t can only be done within the periocl of linrrtation prescribed under Section

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PMD,J w.P.No. 3o9r3 ol2022

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56(21 of the Act. Admittedly, in this^{case, propertywas} purchased in the pubtic auction and the official^{liquidator has} given public notices wi[h regard to the liquidation^{process and} calling for objections with regard to the same.^{Admittedly,the} respondents have not hled any claim petition before the ofhcial liquidator within the prescribed period and therefore the liquidation process has been completed. The petitioners therefore cannot be considered as having the link service with the previous owner and raising the demand after a period of nearly more than ten years is clearly barred by limitation. This Court, in the cases relied upon by the learned counsel for the petitioners, have clearly held so. Further, the Hon'ble High Court of Andhra Pradesh at Amaravathi has also gone into the issue as to whether a claim which was not raised during the liquidation process, can be raised subsequently and following the decision of the Hon'Lrle Supreme Court in the case of Ghanashyam Mishra and Sons Private Limited (cited supra) it was held that such a claim is not permissible.

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Though the iearned Standing counsel claims that the respondents have made an application before the official liquidator in the year 1997 itself, no copy is furnished before the

PMD,J W.P.No. JOg1J of 2022

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Court and only the copr- o[ thc lerter dated ] 8.O8.2022 is filed along with Form-66, in rvhich there is a reference to the letter dated 24.t O.tgg7

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If the respondents had made an application before the ofhcial liquirlator then the claim would have been considered by the official liquidator and the resolution plan/ liquidation plan oI the official liquidator has not been challenged by the respondent authorities. Therelore, the],cannot now [urn around and submit that their dues have to be considered after the liquidation process is completed

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In view of the same, rhis Court holds that the impugr-red demand notice issued by the respondents is not sustainable and it is accordingly set aside.

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18 Accordingry, this writ petition is alrowed. There shall be no order as to costs.

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Miscellaneous petitions, if any, pending in this writ petition, shall stand closed.

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That Rule Nisi has been made Absolute as above witness the Hon,ble SRl. UJJAL BHUYAN, The Chief Justice on this Friday, The Twenty First day of April, Two Thousand And Twenty Three.

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SD/.V.KAVITHA /rRUE coPY//^{ASslsrA[+EGlsrRAR}

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To SECTIOTN OFFICER 1 3??5H[:]T&:?"y^i[i'e%?ffi:t' ff.i?$:I.-er Distrrbution companv

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