An auction purchaser is not statutorily obliged to pay the outstanding electricity dues of the previous owner.

JUDGMENT :

1. The writ petitioner purchased the land, factory and building relating to one M/s. Capricorn Ispat Udyog Pvt. Ltd. in an auction sale conducted by the State Bank of India under the provisions of SARFAESI Act, 2002. The sale was conducted on an “as is where is basis”.

2. It was stipulated in the terms and conditions of the auction sale that the intending purchaser is required to make himself aware of any other encumbrances relating to the property, since the Bank had disclosed all known encumbrances thereat.

3. Since after purchase of the plant and machinery alongwith building and land, for a sum of about Rs. 10 crores, the writ petitioner applied for a fresh electricity connection from the respondent Damodar Valley Corporation (D.V.C.), a deemed licensee, under the Electricity Act 2003.

4. Since after purchase, the writ petitioner changed its name from M/s. Magnum Tradelink Pvt. Ltd. to the present name Ramdoot Rollers Pvt. Ltd.

5. In view of the delay in the processing the petitioner’s application, the writ petitioner moved this Hon'ble Court. By an order dated 17.04.2019 passed in W.P. 7801(W)/2019 this court directed the D.V.C. to expedite the consideration of the writ petitioner’s request for fresh electricity connection.

6. By a communication dated 10.05.2019, the D.V.C. informed that the earlier consumer at the said premises, M/s. Capricorn Ispat Udyog Pvt. Ltd. had outstanding dues payable to the D.V.C. to the extent of about Rs. 22 crores. The liquidation of the said dues of Rs.22 crores of M/s. Capricorn Ispat Udyog Pvt. Ltd. by the petitioner, was made condition precedent to the petitioner being allowed fresh electricity connection.

7. The said position was reiterated in its letter dated 17.05.2019 by the D.V.C. in reply to further communication to the writ petitioner.

8. The writ petitioner contends before this court that since after purchase of the said factory, land and building and plant and machinery, they had no liability in law that would require them to pay the outstanding electricity dues of the previous owners. Reliance has been placed by the writ petitioner firstly on Section 43 of the Electricity Act, 2003 which mandated that the licensee or deemed licensee is statutorily obliged to supply electricity, on request.

9. The writ petitioner also relied upon Section 56 of the said Act, to highlight the statutory obligation of the DVC. The writ petitioner referred to several judgments of the Hon’ble Supreme Court two of which have been placed.

10. The first of such judgment is the case of Special Officer, Commerce, NESCO Vs. Raghunath Paper Mills Pvt. Ltd. reported in (2012) 13 SCC 479. In the said judgment, the Hon'ble Supreme Court had occasion to consider the case of Ahmedabad Electricity Co. Ltd. vs. Gujarat Inns (P) Ltd. reported in (2004) 3 SCC 587 and Haryana SEB Vs. Hanuman Rice Mills reported in (2010) 9 SCC 145.

11. The decision of Isha Marbles vs. Bihar SEB reported in (1995) 2 SCC 648 and the case of Paschimanchal Vidyut Vitran Nigam Ltd. vs. DVS Steels & Alloys (P) Ltd. reported in (2009) 1 SCC 210 were addressed and distinguished. At paragraph 15, 16 and 17, in the NESCO case (supra) the Hon'ble Supreme Court analysed the aforesaid judgments in the following manner :-

“15. In Isha Marbles v. Bihar SEB [(1995) 2 SCC 648] a three-Judge Bench of this Court had an occasion to consider a similar question viz. whether the auction-purchaser is liable to meet the liability of old consumer of electricity to the premises which is purchased by him in the auction-sale from Bihar State Financial Corporation under Section 29(1) of the State Financial Corporations Act, 1951. After considering the relevant provisions of the Electricity Act and the Regulations, this Court held as under: (SCC pp. 663-64, paras 56 and 61-63)

“56. From the above it is clear that the High Court has chosen to construe Section 24 of the Electricity Act correctly. There is no charge over the property. Where that premises comes to be owne