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1993 Supreme(Pat) 317

PATNA HIGH COURT
S.B.Sinha and R.N.Prasad JJ.
North East Fertilisers Private Limited
Versus
Bihar State Electricity Board
Civil Writ Jurisdiction Case No. 7299 of 1992 ;
Decided On : JULY 29, 1993

A state electricity board is bound by its own policy decisions and cannot deviate from them without violating Article 14 of the Constitution of India.

Headnote:

ELECTRICITY ACT, 1910 - SUPPLY OF ELECTRICITY - NEW CONNECTION - LIABILITY FOR ARREARS OF PREVIOUS OWNER - POLICY DECISION OF ELECTRICITY BOARD - APPLICABILITY - ARTICLE 14 OF THE CONSTITUTION OF INDIA - INTERPRETATION AND APPLICATION.

Fact of the Case:

The petitioners purchased an industrial unit at an auction conducted by BICICO. The Bihar State Electricity Board (BSEB) refused to provide a new electricity connection to the petitioners unless they cleared the arrears of the previous owner. The petitioners challenged this decision, arguing that they were not liable for the arrears of the previous owner and that BSEB was bound by its own policy decision not to compel new entrepreneurs to pay the bills of previous owners.

Finding of the Court:

The court held that BSEB was not justified in refusing a new electricity connection to the petitioners. The court relied on its own recent decision in Suman Packaging (Pvt) Ltd. v. Chairman, Bihar State Electricity Board, in which it had held that BSEB cannot refuse to supply electricity to a purchaser of any unit sold in auction. The court also noted that BSEB had adopted a policy decision not to compel new entrepreneurs to pay the bills of previous owners, and that this decision was binding on BSEB.

Issues: 1. Whether BSEB was justified in refusing a new electricity connection to the petitioners. 2. Whether the petitioners were liable for the arrears of the previous owner.

Ratio Decidendi: 1. BSEB is bound by its own policy decision not to compel new entrepreneurs to pay the bills of previous owners. 2. The petitioners were not liable for the arrears of the previous owner.

Final Decision: The court quashed the BSEB's order refusing to provide a new electricity connection to the petitioners and directed BSEB to supply electricity to the petitioners within three weeks.

Judgment

1. The petitioners in this application have prayed for quashing a letter dated 2-12-1991 as contained in Annexure 8 to the writ application, whereby and whereunder respondent No. 5 directed the petitioners to clear off all arrears of bills of the ex-owner for providing a new connection to him as also for issuance of a writ of or in the nature of Mandamus directing the respondents to supply electrical energy to the premises of the petitioners.

2. The fact of the matter lies in a very narrow compass.

3. An Advertisement was issued in daily newspaper Hindustan Times that Bihar State Credit and Investment Corporation intends to put the lands, building, plant and machineries of M/s. S. R. Fertilizer and Chemical Pvt. Ltd. Bela Industrial Area, Muzaffarpur on auction and invited tenders from the persons who intended to buy the same. Pursuant to the said advertisement, the petitioner No. 2 submitted his tender and his offer of about Rs. 8,00000.00 (eight lacs) having been found to be the highest, the same was accepted.

4. A writ application was filed in this Court by S.R. Fertilizers and Chemicals Pvt. Ltd. which was numbered as C.W.J.C. No. 2740 of 1991. An interim order of stay was passed in the aforementioned case as a result whereof the petitioner No. 2 could not obtain delivery of possession but by an order dated 15-11-1991, the said writ application was dismissed. Thereafter, delivery of possession was effected on 23-11-1991. Thereafter, a Private Limited Company was constituted in the name and style of petitioner No. 1 and it sent a requisition for supply of electrical energy to the petitioner by giving a new connection. According to the petitioners, the respondent Boards has adopted a policy decision regard to supply of electrical energy to the buyers of industrial units which would be evident from the letter dated 4-9-1978 by which the General Manager-cum-Chief Engineers were directed that new entrepreneurs should not be compelled to pay the bills of the previous owners if they are not connected with it. The aforementioned letter dated 4-9-1978 is contained in Annexure 6 to the writ application.

5. The petitioners have contended that under the terms and conditions laid down by the BICICO for sale of unit in question, the petitioner is liable only to pay the liabilities of industrial area and not other liabilities including the liabilities of the previous owner by way of non-payment of dues towards electrical energy. However, by reason of the impugned order dated 2-12-1991, respondent No. 5 directed that unless and until the dues of M/s. S. R. Fertilizers and Chemicals Pvt. Ltd. is cleared no new electrical connection would be granted to the petitioners. The BICICO, however, by letter bearing memo No. 793 dated 4-7-1992 also requested the Executive Engineer, Bihar State Electricity Board, Muzaffarpur, to grant electric connection to the petitioner as the aforementioned M/s. S. R. Fertilizers and Chemicals Pvt. Ltd. are two separate companies.

6. The question which arises for consideration in this application is as to whether the Bihar State Electricity Board was justified in refusing new connection to the petitioners.

7. This aspect of the matter has been dealt with in details in a recent decision of this Court in Suman Packaging (Pvt) Ltd. V/s. Chairman, Bihar State Electricity Board (C.W.J.C. No. 5358 of 1992) which has been disposed of on 22-7-1993 wherein it has been held that in view of its own circulars as also the statutory liability to supply electrical energy to a consumer, it cannot refuse to supply electrical energy to a purchaser of any unit sold in auction.

8. Apart from the aforementioned decision, it is evident that the Chairman of the Board himself has taken a decision which has been communicated by the Engineer in Chief to all General Manager-cum-Chief Engineer vide his letter dated 4-9-1978, as contained in Annexure 6, which reads thus :-

"(i) The extension of power supply means H.T. or L. T. to the




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