Unpaid electricity dues constitute a charge on the property and can be recovered from the subsequent transferee under Regulation 10.5 of the Indian Electricity Act 2003 and Regulations 2005.

DR.D.Y.CHANDRACHUD, J.

I The Controversy

1. Rule, by consent returnable forthwith. With the consent of Counsel and at their request the Petition is taken up for hearing and final disposal.

2. In these proceedings under Article 226 of the Constitution the Petitioner seeks (i) a direction to the Maharashtra State Electricity Distribution Company Limited and its Superintending Engineer (the Second and Third Respondents) to allow its application dated 7 October 2010 for the grant of a temporary 100 HP load power supply; and (ii) the setting aside of a demand raised in the amount of Rs. 39,57,15,400/by a letter dated 18 November 2010.

3. The Petitioner is a transferee of the premises in question from the fourth Respondent. The Fourth Respondent purchased the premises in an auction sale conducted in execution of a recovery certificate issued by the Debts Recovery Tribunal. The issue which is raised in the Petition is whether arrears of unpaid electricity charges can be claimed from the Petitioner, who is a subsequent transferee, and if so, what is the quantum of those charges to which the Petitioner is liable. The Petitioner contends that it seeks a fresh electricity connection and not the restoration of the earlier connection which was discofor nonpayment of charges and is hence not liable to pay the outstandings of the erstwhile owner. The Second Respondent, on the other hand, relies on statutory regulations – the Maharashtra Electricity Regulatory Commission (Electricity Supply Code and Other Conditions of Supply) Regulations 2005. Under Regulation 10.5, unpaid electricity dues constitute a charge on the property and can be recovered from the transferee (subject to a maximum of six months of unpaid charges for electricity supplied).

II The Facts

4. In 2001, ICICI Bank Limited filed an application before the Debts Recovery Tribunal against Malhotra Steels (Bombay) Limited, the Fifth Respondent. The debt of the Fifth Respondent was assigned to Kotak Mahindra Bank which became the applicant before the Tribunal. On 22 February 2005 a recovery certificate was issued by the Tribunal and proceedings in execution were initiated against the Fifth respondent. The properties of the Fifth Respondent were attached and the Recovery Officer ordered the sale of the attached property in satisfaction of the recovery certificate. The property in which the Petitioner now claims interest was sold in execution of the recovery certificate. The property is situated at village Horale in the Taluka of Khalapur in the District of Raigad. The terms and conditions governing the sale of the property stipulated in clauses 3 and 4 as follows :

“3. So far as known to this Tribunal / Recovery Officer, there are no claims, liabilities or encumbrances other than those notified in the schedule. The sale is subject to all such claims, liabilities or encumbrances, known or unknown, and the Tribunal / Recovery Officer undertakes no liability there under either to purchaser or to any authority whatever.

4. The properties shall be sold on “AS IS WHERE IS AND WHAT IS BASIS”.”

5. A proclamation of sale was issued and an auction sale took place at which the Fourth Respondent was the highest bidder in the amount of Rs.78 lacs. The sale in favour of the Fourth Respondent was confirmed on 7 May 2008 and a certificate of sale was issued on 23 March 2009 and 19 May 2009. The Petitioner acquired the property from the Fourth Respondent under a registered deed of conveyance dated 30 March 2010.

6. The Petitioner submitted an application on 7 October 2010 for the supply of electricity. On 28 October 2010 the Third Respondent pointed out certain discrepancies in the application and sought a disclosure of details on the arrears which were payable by the Fifth Respondent. On 12 November 2010 the Second Respondent submitted a reply to the Third Respondent stating that the discrepancies have been rectified. On 18 October 2010 a notice of demand was issued by the Superintending