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PATNA HIGH COURT
S.B.Sinha and R.N.Prasad JJ.
Suman Packaging Private Ltd., Digha Ghat
Versus
Chairman Bihar Electricity Board
Civil Writ Jurisdiction Case No. 5358 of 1992 ;
Decided On : JULY 22, 1993
ELECTRICITY - SUPPLY - NEW CONNECTION - PURCHASER OF SICK INDUSTRY IN AUCTION UNDER STATE FINANCIAL CORPORATION ACT - DENIAL OF CONNECTION ON GROUND OF DUES OF PREVIOUS OWNER - LEGALITY - CIRCULAR OF ELECTRICITY BOARD PROVIDING FOR GRANT OF CONNECTION IN SUCH CASES - APPLICABILITY - INTERPRETATION OF SECTION 24 OF ELECTRICITY ACT - POWER TO DISCONNECT SUPPLY - SCOPE - DISTINCTION BETWEEN CONTRACTUAL DUES AND STATUTORY DUES - TRANSFER OF PROPERTY ACT, SECTION 2(D) - STATE FINANCIAL CORPORATION ACT, SECTION 29.
Fact of the Case:
The petitioner purchased a sick industry in an auction held under Section 29 of the State Financial Corporation Act. The Bihar State Electricity Board (BSEB) refused to provide a new electrical connection to the petitioner on the ground that there were huge dues against the original owner. The petitioner contended that it was not liable for the dues of the erstwhile owner and that BSEB's circular letter dated 19-1-1972 provided for grant of connection in such cases.
Finding of the Court:
The court held that BSEB was not entitled to refuse to provide a new electrical connection to the petitioner. The court interpreted Section 24 of the Electricity Act and held that it only empowers the licensee to disconnect supply in case of non-payment of charges or other sums due from the consumer. The court further held that the dues of a consumer are contractual dues and not statutory dues, and that BSEB cannot create a charge on the unit for such dues. The court also held that the transfer of the industry to the petitioner under Section 29 of the State Financial Corporation Act was a statutory transfer and that the petitioner was not bound by any personal agreement of the previous owner.
Issues: 1. Whether BSEB was entitled to refuse to provide a new electrical connection to the petitioner on the ground of dues of the previous owner? 2. Whether the circular letter of BSEB dated 19-1-1972 was applicable to the facts of the case? 3. Whether Section 24 of the Electricity Act empowered BSEB to disconnect supply in case of non-payment of contractual dues?
Ratio Decidendi: 1. BSEB was not entitled to refuse to provide a new electrical connection to the petitioner on the ground of dues of the previous owner because: - The dues of a consumer are contractual dues and not statutory dues. - BSEB cannot create a charge on the unit for such dues. - The transfer of the industry to the petitioner under Section 29 of the State Financial Corporation Act was a statutory transfer and the petitioner was not bound by any personal agreement of the previous owner. 2. The circular letter of BSEB dated 19-1-1972 was applicable to the facts of the case because it provided for grant of connection in cases where the old consumer had left the premises and a new person, not connected with him in any manner, had come in occupation. 3. Section 24 of the Electricity Act did not empower BSEB to disconnect supply in case of non-payment of contractual dues because: - It only empowers the licensee to disconnect supply in case of non-payment of charges or other sums due from the consumer. - The dues of a consumer are contractual dues and not statutory dues.
Final Decision: The writ petition was allowed and BSEB was directed to provide a new electrical connection to the petitioner on the terms and conditions laid down under Clause VI of the scheduled appended to the Indian Electricity Act, 1910.
S. B. Sinha, J.
1. The petitioner which is a company incorporated under the Indian Companies Act, 1956 in this application, has inter alia prayed for issuance of a writ of or in the nature of mandamus directing the Bihar State electricity Board and its officers to supply electrical energy to the factory premises purchased by it in an auction held under Sec.29 of the State financial Corporation Act.
2. The petitioner purchased the said property for a consideration of rs.8 laks and the same was registered with the Registrar of Companies, bihar. The said sale was completed on 29-11-1991.
3. The said auction sale was subject matter of a writ application which was dismissed. A special leave petition was filed against the said order, but ultimately the Supreme Court also dismissed the same. According to the petitioner he had to spend a huge amount in the said litigations. The possession of the said factory was handed over to the petitoner on 23-2-1992.
4. The petitioner has contended that after purchasing the aforementioned unit it had invested more than Rs.3 laks in renovating the delapidated factory-building and reparing of the machines.
5. The electrical connection of the said unit had however, been disconnected by the Bihar State Electricity Board, allegedly on the ground that there was a huge dues against the original owner.
6. The petitioner brought the said matter to the notice of the Bihar state Financial Corporation who in turn wrote a letter to the Member (Finance) Bihar Electricity Board to the effect that he was not liable for any dues of the erstwhile owner and his application for fresh connection may favourably be considered.
7. The petitioner filed an application for grant of fresh electrical connection on 9-6-1992 which is contained in Annexure-1 to the writ application.
8. According to the petitioner be personally mett the authorities of the respondent-Board and tried to impress upon them that it bad purchased a sick industry and invested a huge amount under the rehabilitation programme and thus it was not liable to pay the arrears in relation to the old connection.
9. It has further been contended by the petitioner that it was in no way connected with the old owner and they were completely strangers to each other.
10. The petitioner has contended that in fact, the Bihar State Electricity board itself has issued a circular letter No.43 (GH) dated 19-1-1972 where in it has been laid down as follows :-
"instance have come to our notice in which reconnection was given to premises, disconnected earlier for non-payment of electric dues, without realising the arrear dues In many cases, the consumers, who had committed default in payment of the electric dues were found to have obtained the reconnection in the name of some other member of their families. By giving reconnection without realising the arrear, dues, the chances of recovery of the dues against the premises become remote. In this manner, considerable loss of revenue is being caused to the Board. This has to be prevented at all cost.2. In the matter of giving reconnection to disconnect premises, the following instructions are accordingly laid down : - (i) Re-connection to a disconnect premises shall not be given without realisation of full dues outstanding there against. (ii) There may be a genutne case in which the old consumer (who had committed default in payment of the dues) has left the premises for good and another person, not connected with him in any manner has come in occupation thereof and wants re-connection. In such a case, it may neither, be legal nor proper to insist on realisation of the arrear dues from him for giving re-connection. In such a case, the Assistant engineer concerned should personally enquire into the matter and, on being satisfied regarding its genuiness, submit a detailed report in regard thereto his Suprintending Engineer, through his Executive Engineer for approval to give reconnection to the premises, without realisation
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