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2024 Supreme(Cal) 1043

IN THE HIGH COURT AT CALCUTTA
T. S. SIVAGNANAM, C.J., HIRANMAY BHATTACHARYYA, JJ.
Damodar Valley Corporation & Anr. – Appellants
Versus
Saluja Steel and Power Private Limited & Ors. – Respondents
M.A.T. 611 of 2023 With I.A. No. CAN 1 of 2023
Decided on : 02-07-2024

Advocate Appeared:
For the Appellants :Mr. S.N. Mookherjee, Sr. Adv., Mr. Prasun Mukherjee, Mr. Deepak Agarwal, Mr. Subhrojyoti Mookherjee, advocates
For the Respondents:Mr. Jayanta Kumar Mitra, Sr. Adv., Mr. Rajarshi Dutta, Mr. Sarbajit Mukherjee, Mr. Rahul Auddy, Mr. Aditya Gooptu, advocates

IMPORTANT POINT
A distribution licensee cannot recover electricity dues from a new owner without establishing a nexus with the previous owner, and the requirement for a 'No Dues Certificate' is directory.

Headnote:

Electricity - Demand Recovery - Electricity Act, 2003 (Sections 43, 50, 181) - The court interpreted the provisions of the Electricity Act and the Electricity Supply Code Regulations, emphasizing that a distribution licensee cannot recover dues from a new owner without establishing a nexus with the previous owner.

Fact of the Case:

The respondents purchased property intending to operate a factory and applied for a new electricity connection. DVC demanded payment of outstanding dues from the previous owner before granting the connection, which the respondents contested as illegal.

Finding of the Court:

The court found that the demand for dues from the previous owner was unjustified as the respondents had no nexus with the previous consumer, and the requirement for a 'No Dues Certificate' was deemed directory, not mandatory.

Issues: Whether DVC can recover arrears of electricity dues from the new owner of the premises based on the previous owner's outstanding dues.

Ratio Decidendi: The court held that recovery of dues from a new owner requires establishing a nexus with the previous owner, and the provisions regarding 'No Dues Certificate' are directory.

Result: The appeal by DVC is dismissed, upholding the lower court's decision.

JUDGMENT :

Hiranmay Bhattacharyya, J.

1. This intra Court appeal is at the instance of Damodar Valley Corporation (for short “DVC”) and is directed against the Judgment and Order dated March 24, 2023 passed by a learned Single Judge in WPA 1853 of 2023.

2. By the impugned judgment and order, the writ petition was allowed thereby quashing the demand for outstanding dues of the erstwhile consumer dated November 29, 2022 made by DVC from the writ petitioners/respondents herein. DVC was directed to forthwith give new electricity connection to the respondents at the premises-in-question upon compliance of all other formalities by the respondents.

3. Facts giving rise to the writ petition and this appeal, in a nutshell, are as follows.

The respondents herein purchased an immovable property situated at village Mahathadih Gadi Sirampur, Giridih being Plot Nos. 412, 413, 414, 415, 416, 418, 404, 233, Dag No./Khesra Nos. 30, 25, 33, Mauja Mahathadih measuring about 10 acres 18.5 decimals (hereinafter referred to as the “said premises”) from M/s Biswanath Ferro Alloys along with Nirbhay Kumar Shahabadi by 4 registered deeds of sale for valuable consideration. The respondents intended to operate a factory unit from the said premises. Respondents claim to have submitted copies of the application form along with other relevant documents under a covering letter dated 26th November, 2019 making a request for supply of electricity at the said premises. On the advise of the officials of DVC, respondents claim to have submitted another application for new High Tension (for short “HT”) power connection from DVC on 27th September, 2022. The respondents also claim to have submitted further documents on September 28, 2022, as sought for by the officers of DVC after scrutiny. DVC issued a letter dated November, 29, 2022 calling upon the respondents to make payment of an amount which was due from M/s Biswanath Ferro Alloys i.e., the erstwhile consumer prior to initiation of power supply connection process.

4. Alleging that the aforesaid demand of DVC is wholly illegal, unjust and arbitrary, the respondents herein approached the writ Court praying for setting aside the letter dated 29th November, 2022 and sought for a writ of mandamus commanding DVC to supply electricity to the said premises without requiring the respondents to clear the outstanding dues of erstwhile consumer.

5. The writ petition was allowed by the impugned judgment and order, and being aggrieved, DVC has approached this Court.

6. Mr. Mukherjee, learned Senior Counsel appearing in support of the appeal, contended that the request for supply of electricity shall have to be by an application by the owner or occupier of any premises for supply of electricity to such premises. He further contended that such a request has to be made in the format prescribed therefor and an applicant shall mean an application complete in all respects along with document showing payment of necessary charges and other compliances. In support of such submission he placed reliance upon Section 43 of the Electricity Act, 2003 (for short “the 2003 Act”) and the Explanation appended thereto. He further contended that the State Commission is empowered to specify an Electricity Supply Code (for short “ESC”) to provide for recovery of electricity charges, intervals for billing of electricity charges, disconnection of supply of electricity etc. By referring to Section 181 of the 2003 Act, Mr. Mukherjee contended that the State Commission may, by notification, make regulations and the Jharkhand State Electricity Regulatory Commission, Ranchi (for short the “Commission”) framed the (Electricity Supply Code) Regulations, 2015 (for short the “2015 Regulations”) in exercise of the power conferred by Clause (x) of Sub-section (2) of Section 181 read with Section 50 of the 2003 Act. Mr. Mukherjee contended that the expression “other compliances” appearing in Explanation to Section 43 of 2003 Act would include the conditions stipulat

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