IMPORTANT POINT
Liability of purchaser of premises to pay electricity dues of defaulter predecessor.

JUDGMENT

P. Sathasivam, J.-Leave granted.

2. This appeal is directed against the final judgment and order dated 04.11.2010 passed by the High Court of Orissa at Cuttack in Writ Appeal No. 237 of 2010 whereby the Division Bench while affirming the order dated 05.08.2010 passed by the learned single Judge dismissed the appeal filed by the appellants herein.

3. Brief Facts:

(a) In the year 2007, pursuant to the order of the Company Judge, High Court of Orissa, in Companies Act Case No. 25 of 2005, the Official Liquidator, made an advertisement for sale of movable and immovable assets and properties of the Factory Unit of M/s Konark Paper & Industries Limited which was in liquidation on “as is where is and whatever there is” basis.

(b) The sale was confirmed in favour of respondent No.1 – M/s Raghunath Paper Mills Pvt. Ltd., being the highest bidder, and the possession of the Unit was handed over on 28.03.2008. Since there was no power supply, respondent No.1 made an application to the Chief Executive Officer, North Eastern Electricity Supply Company of Orissa Limited (in short “ the NESCO”) for restoration of the same. Respondent No. 1 also executed an agreement dated 27.03.2009 with the NESCO for supply of construction power in the Unit. There being no reply from the side of the NESCO, respondent No.1, vide letter dated 26.08.2009, again requested for permanent supply of power. By letter dated 21.05.2010, the NESCO directed respondent No.1 to pay the arrears of electricity dues amounting to Rs. 79,02,262/- outstanding against the premises in question.

(c) Being aggrieved, respondent No.1 filed a petition being Writ Petition (C) No. 9807 of 2010 before the High Court of Orissa praying for quashing of the demand letter dated 21.05.2010 issued by the NESCO with a direction to provide permanent supply of power.

(d) Learned single Judge, by order dated 05.08.2010, after considering various provisions of law governing the issue in question allowed the petition and directed the NESCO to provide electricity to the Unit of respondent No.1 within a period of 7 days from the date of his judgment.

(e) Dissatisfied with the decision of the learned single Judge, the appellants filed Writ Appeal No. 237 of 2010 before the Division Bench of the High Court. The Division Bench, by order dated 04.11.2010, finding no illegality in the order of the learned single Judge, dismissed the appeal filed by the appellants.

(f) Aggrieved by the said decision, the appellants have preferred this appeal by way of special leave petition before this Court.

4. Heard Mr. Suresh Chandra Tripathy, learned counsel for the appellants and Mr. P.P. Rao, learned senior counsel for respondent No.1.

5. The only point for consideration in this appeal is whether a Company, which purchased the property of another Company under liquidation through auction, is liable to pay the arrears of electricity dues outstanding against the erstwhile Company.

6. It is not in dispute that respondent No. 1 was the highest bidder and the sale was confirmed in its favour and possession of the Unit was handed over on 28.03.2008 itself. It is further seen that after getting the possession and after finding that there is no supply power in the premises in question, respondent No. 1 made an application for availing the same to the Chief Executive Officer, NESCO. Since there was no reply on their part, respondent No. 1, by letter dated 26.08.2009, again requested for permanent supply of electricity, for which, by letter dated 21.05.2010, the NESCO directed respondent No. 1 to pay the arrears of electricity dues amounting to Rs. 79,02,262/- outstanding against the premises which was purchased in auction through Official Liquidator. Being aggrieved by the same, respondent No. 1 challenged the said demand order before the High Court. Learned single Judge, with reference to various guidelines/rules applicable, quashed the demand order dated 21.05.2010 and the Division Bench also affirmed the same wh