Back
2020 Supreme(Cal) 34
IN THE HIGH COURT OF CALCUTTA
Dipankar Datta, Protik Prakash Banerjee, J.
Damodar Valley Corporation And Others - Appellants
Versus
Shree Ramdoot Rollers Private Ltd. - Respondent
Appeal From Order No. 956 of 2019
Decided On : 24-04-2020
Anindya Kumar Mitra, Advocate, Pradip Tarafdar, Advocate, Subir Pal, Advocate, Jayanta Kumar Mitra, Advocate, Hashnuhana Chakraborty, Advocate, Debajyoti Manna, Advocate, Moumita Bhattacharjee, Advocate
Headnote:(A) Electricity Act, 2003 - Sections 2(15) and 43 - West Bengal Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2013 - Demand for electricity supply - An auction purchaser is not liable for the debts of a prior consumer unless a legal nexus is established and the new consumer is 'for the time being connected' to the works of the licensee. (Paras 2, 12, 62, and 96)
(B) Regulatory Provisions - Terms and conditions imposed by a distribution licensee to ensure payment of outstanding dues can be valid only if such provisions are not arbitrary or unreasonable. (Paras 11 to 14)
Facts of the case:
The appellants denied electricity supply to the respondent after it purchased property previously owned by a defaulting consumer unless previous outstanding dues were cleared. The High Court ruled in favor of the respondent stating no legal obligation existed to clear past dues without sufficient nexus being proved.
Findings of Court:
The appellants failed to demonstrate that the respondent was a 'consumer' under the new Act and that the premises were connected for the purpose of receiving electricity.
Issues: The case revolved around the legal obligations of new consumers regarding pre-existing debts of previous consumers in the context of electricity supply regulations.
Ratio Decidendi: The court affirmed that electricity charges do not run with the land and that a new consumer is only liable for previous debts if a direct connection with the past usage and obligations is legally established.
Result: Appeal dismissed.
Act Referred
DAMODAR VALLEY CORPORATION ACT: S.20, S.3(1), S.12(b)
ELECTRICITY ACT: S.24, S.56(1), S.56(2), S.43, S.2(15), S.82(1), S.86, S.181, S.50, S.181(2)(x), S.64, S.14, S.2(c), S.56, S.2(70)
ELECTRICITY SUPPLY CODE: Cl.4.3(g), Cl.4.3(h)
WEST BENGAL ELECTRICITY REGULATORY COMMISSION REGULATIONS: Reg..3.4.2, Reg.4.6.4
| Table of Content |
|---|
| 1. validity of electricity supply condition (Para 1 , 2 , 3) |
| 2. precedent cases on consumer liability for electricity dues (Para 4 , 5 , 6) |
| 3. differentiation between new and existing consumers (Para 9 , 10 , 11) |
| 4. definition and implications for consumers under the law (Para 12 , 62) |
| 5. operational conditions for electricity supply recovery claims (Para 90 , 95) |
JUDGMENT
Dipankar Datta, J. - The legality and propriety of a judgment and order dated June 19, 2019 of a learned Judge of this Court, practically allowing W.P. 10085(W) of 2019 presented by the writ petitioner (the respondent before us), is questioned in this intra-court writ appeal. Communications dated May 10 and 17, 2019 issued by the appellants were quashed by His Lordship and it was observed that they are obliged to supply electricity to the writ petitioner after effecting connection within four weeks, without the writ petitioner being liable to pay any dues of the previous consumer, M/s. Capricorn Ispat Udyog Pvt. Ltd. (hereafter Capricorn).
2. A question of seminal importance arises for decision in this appeal, i.e., whether the appellants are justified in insisting that as a condition precedent for supplying electricity to it, the writ petitioner is required to clear the outstanding dues of Capricorn inclusive of delayed payment surcharge (hereafter DPS)?
3. It would be appropriate at this stage to note the decisions of the Supreme Court cited by the parties on the point as to whether a distribution licensee of electricity is entitled in law to claim liquidation of the dues left behind by a defaulting consumer from an intending consumer while the latter seeks supply of electricity upon taking over the property of the former by participating in proceedings initiated to enforce mortgages and clearance of the dues of its creditors.
4. Isha Marbles vs. Bihar State Electricity Board , (1995) 2 SCC 648 , is the first in the sequence of several decisions rendered by the Supreme Court. It was, however, a case to which the ELECTRICITY ACT , 1910 (hereafter the old Act) applied. The conclusions drawn are reproduced below:
"61. What we have discussed above appears to be the law gatherable from the various provisions which we have detailed out above. It is impossible to impose on the purchasers a liability which was not incurred by them.
62. No doubt, from the tabulated statement above set out, the auction-purchasers came to purchase the property after disconnection but they cannot be 'consumer or occupier' within the meaning of the above provisions till a contract is entered into.
63. We are clearly of the opinion that there is great reason and justice in holding as above. Electricity is public property. Law, in its majesty, benignly protects public property and behoves everyone to respect public property. Hence, the courts must be zealous in this regard. But, the law, as it stands, is inadequate to enforce the liability of the previous contracting party against the auction-purchaser who is a third party and is in no way connected with the previous owner/occupier. It may not be correct to state, if we hold as we have done above, it would permit dishonest consumers transferring their units from one hand to another, from time to time, infinitum without the payment of the dues to the extent of lakhs and lakhs of rupees and each one of them can easily say that he is not liable for the liability of the predecessor in interest. No doubt, dishonest consumers cannot be allowed to play truant with the public property but inadequacy of the law can hardly be a substitute for overzealousness. "
(emphasis supplied)
5. Ahmedabad Electricity Co. Ltd. vs. Gujarat Inns Pvt. Ltd. , (2004) 3 SCC 587 = AIR 2004 SC 2171 , was another case arising from the old Act. While observing that the wide propositions of law laid down in Isha Marbles (supra) merited reconsideration, the Court held that "in case of a fresh connection though the premises are the same, the auction-purchasers
