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2006 Supreme(Cal) 418

High Court Of Calcutta
Girish Chandra Gupta, J.
RASHI METALS PVT.LTD. - Appellant
Versus
WEST BENGAL STATE ELECTRICITY BOARD - Respondent
W. P. 1327 Of 2005
Decided On : 07/14/2006

Advocates Appeared:
BHASKAR MITRA, SAMRAT SEN, SUBHRANSU GANGULY

A new consumer of electricity may be liable to pay the outstanding dues of the erstwhile consumer if there is a nexus between the new consumer and the erstwhile consumer, and the new consumer was aware of the outstanding dues at the time of purchase.

Headnote:

ELECTRICITY ACT, 2003 - SECTION 43 - ELECTRICITY SUPPLY - SUPPLY OF ELECTRICITY TO NEW CONSUMER - LIABILITY TO PAY OUTSTANDING DUES OF FORMER CONSUMER - ARBITRARINESS - PUBLIC UTILITY SERVICE - TARIFF FIXATION - BAD DEBT - INTEREST OF SOCIETY - MANDAMUS - REFUSAL TO SUPPLY ELECTRICITY - JUSTIFICATION.

Fact of the Case:

The petitioner, a new consumer, sought a writ of mandamus directing the electricity board to supply high tension energy to its factory. The board refused to supply electricity unless the outstanding dues of the erstwhile consumer, Falta Steels Private Ltd., were paid. The petitioner contended that the board's refusal was arbitrary and that it was not liable to pay the dues of the erstwhile consumer.

Finding of the Court:

The court held that the board's refusal to supply electricity was not arbitrary. The court found that the petitioner was aware of the outstanding dues of the board and that it had purchased the unit on the condition that it was liable to pay the statutory liability. The court also found that there was no clear-cut finding or proof of absence of any nexus between the erstwhile consumer and the petitioner.

Issues: 1. Whether the board's refusal to supply electricity was arbitrary. 2. Whether the petitioner was liable to pay the dues of the erstwhile consumer.

Ratio Decidendi: 1. The board's refusal to supply electricity was not arbitrary as the petitioner was aware of the outstanding dues and had purchased the unit on the condition that it was liable to pay the statutory liability. 2. In the absence of any clear-cut finding or proof of absence of any nexus between the erstwhile consumer and the petitioner, the petitioner could not avoid its liability to pay the dues of the erstwhile consumer.

Final Decision: The petition was dismissed with no order as to costs.

GIRISH CHANDRA GUPTA J.

( 1 ) THIS application is for a writ in the nature of mandamus directing the respondent Nos. 1, 2 and 3 to supply high tension energy to the tune of 2750 Kilowatt to the petitioner at its factory at Falta industrial Growth Centre. A prayer has also been made for a writ in the nature of certiorari and a writ prohibiting the respondents Nos. 1, 2, and 3 from demanding the dues of Falta Steels Private Ltd. from the petitioner nos. 1. There is also a prayer for a declaration that the petitioner No. 1 is not liable to pay outstanding dues of Falta Steels Private Ltd. , and a declaration that the West Bengal State Electricity Board (hereinafter referred to as the 'board') cannot insist upon liquidation of the outstanding dues of falta Steels Private Ltd. as a condition precedent and a prayer for mandatory injunction directing the Board to commence supply of high tension energy to the petitioners in terms of their requisition dated 5th April, 2005.

( 2 ) IT would at once become clear from the prayers made by the petitioners themselves that the Board has not refused to supply electricity to the petitioners altogether. They have, on the contrary, refused to supply unless the dues of the erstwhile consumer namely Falta Steels Private Ltd. , are paid. In paragraph 14 of the writ petition the following allegations have been made :

"your petitioners have now been informed by the WBSEB, albeit verbally, that unless the previous arrear dues of Falta Steels Pvt. Ltd. are cleared, electricity will not be supplied to your petitioner No. 1 at its factory at falta Industrial Growth Centre, Sector III, Plot Nos. A-1, A-2, Falta, p. O. Nainan, P. S. Diamond Harbour, District 24-Parganas (South ). This condition precedent his been communicated by the officers of the WBSEB to Sri Jitendra Agarwal, the Director of your petitioner No. 1 when he went to enquire about the fate of your pettioner No. 1's application. "

( 3 ) IN paragraph 10 of the affidavit-in-opposition affirmed by one Sri Benoy sen on 6th July, 2005 the contents of the paragraph 14 have been virtually admitted and the following statements have been made :

"as stated hereinbefore the petitioners have no right to obtain connection of electricity to the said industrial unit and/or factory, and, in any event of the matter without payment of the said outstanding dues of Rs. 5. 66 crores of the Board. "

( 4 ) IN paragraph 9 of the affidavit-in-reply the petitioners have "denied that the petitioners have no right to obtain connection of electricity to the said industrial unit and/or factory or that in any event of the matter without payment of the said outstanding dues of Rs. 5. 66 crores of the Board as alleged or at all. "

( 5 ) THE petitioners have also claimed and contended in paragraph 10 of their affidavit-in-reply that the "dues of Falta Steels Private Ltd. cannot be a ground to refuse to supply electrical energy" for there is no provision of law authorising the Board to recover the dues of the erstwhile consumer from a new consumer who may come to occupy the premises.

( 6 ) IT would therefore appear that the only question which falls for determination in this writ petition is "whether the refusal to supply electricity except upon payment of the outstanding dues of the erstwhile consumer is justified ?" To put it differently the question can also be posed thus "did the board arbitrarily refuse to give supply of electricity to the writ petitioners?"

( 7 ) THE petitioners have themselves in ground Nos. 2, 5, 9 and 11 have alleged that the Board acted unreasonably, arbitrarily and contrary to the principles of equity. The petitioners have prayed for writs in the nature of certiorari and prohibition. Refusal on the part of the Board to give supply of energy to the writ petitioners can be quashed or the Board can be prohibited from insisting upon such payment provided the refusal is arbitrary. Unless the refusal is arbitrary neither can refusal be quashed nor a writ i




























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