IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
P.R. RAMACHANDRA MENON, PARTH PRATEEM SAHU, JJ.
Chhattisgarh State Power Distribution Company Limited – Appellant
Versus
M/s. Maheshwari Steels, A Partnership firm through Partner Murlidhar Rathi S/o Late Durgadasji Rathi – Respondent
Writ Appeal No. 182 of 2018, Writ Appeal No. 519 of 2019
Decided on : 13-04-2021
Electricity Act, 2003 - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 35 - Security Interest (Enforcement) Rules, 2002 - Companies Act, 1956 - Property - Electricity dues - Grievance is against judgment passed by learned Single Judge holding that purchaser of property in an auction conducted in terms of provisions of SARFAESI Act stand on a different footing and that since Electricity dues of erstwhile owner/occupier of premises having not been shown in sale notice, he is not liable to satisfy dues of erstwhile owner/occupier of premises - Held, Submission does not have any pith or substance insofar as 'duress/undue pressure' is not substantiated by Writ Petitioner/Applicant with regard to satisfaction of installments pursuant to application preferred by Writ Petitioners themselves, agreeing to satisfy arrears and to grant them benefit of installments - Clearance of such statutory dues or any portion thereof cannot be cited as an instance of any duress or pressurizing circumstance, but for inferring that clearance of such arrears is necessary to obtain electricity connection in terms of 'Supply Code' which is statutory in character - Demand raised by Appellant/Licensee to clear arrears of Electricity dues of erstwhile owner/occupier for effecting supply of electricity connection to Writ Petitioners/auction purchasers, is valid and justified and verdict rendered by learned Single Judges interdicting said proceedings is not correct or sustainable in law - Writ petitions dismissed.
JUDGMENT :
P.R. Ramachandra Menon, J.
1. —Is it obligatory for the purchaser of the premises/property to meet the arrears/Electricity dues of the former consumer for getting a fresh electricity connection or to have the old one restored, when there is no privity of contract, the subsequent purchaser being a stranger?
—What is the nature of the Electricity dues and is it statutory or purely contractual between the Licensee and the Consumer?
—Is there any provision either under the Electricity Act, 2003 (for short 'the 2003 Act') or in the Chhattisgarh State Electricity Supply Code, 2011 (for short 'the Supply Code') or the Chhattisgarh State Electricity Regulatory Commission (Redressal of Grievances of Consumers) Regulations, 2011 (for short 'the 2011 Regulations'), to insist for payment of arrears in respect of the connection given to the premises earlier, from the new owner/occupier of the premises for getting electricity connection?
—If there is any such provision, can the relief be given to the new occupier/owner for getting absolved from the liability without challenging the vires of the said provision and getting it declared ultra vires?
—If there is any such stipulation in the 'Supply Code' framed by the Regulatory Commission of the State, in exercise of the power under the 2003 Act, will it not become 'part of the statute'?
—Is there any difference between the owner of the property/premises who purchased the same in an 'auction proceedings' under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the SARFAESI Act') and any other person who goes for 'negotiable purchase', with reference to the satisfaction of the Electricity dues of the erstwhile owner/occupier of the property?
—Can the Electricity supply/connection provided by the Licensee under the Act 2003/Supply Code/2011 Regulations to the consumer be regarded as a 'secured asset' or 'property', to be dealt with under the SARFAESI Act?
—If the Secured Creditor has sold the property in 'as is where is' and 'as is what is' condition, but for the known encumbrances mentioned in the sale notice and alerting that statutory dues and such other payments shall be the look out of the purchaser, can the purchaser turn around and allege any lapse on anybody else in this regard?
—Can the Licensee/Distributor who has effected the Electricity supply and not connected with the sale proceedings under the SARFAESI Act, be found fault with for the lapse if any, on the part of the Secured Creditor in mentioning or non-mentioning the encumbrance/Electricity dues in the sale notice?
—What is the scheme for supply of electricity under the 2003 Act/Supply Code/2011 Regulations, when the connection is intended to be given to the "premises" and not to the individual, who can either be owner or occupier?
—How to reconcile with the various judgments rendered by the Apex Court in this regard, at different points of time?
These are the questions that are germane to the subject matter of challenge involved in these appeals.
2. The above appeals have been preferred at the instance of the Licensee/Distributor of Electricity– which is a State Government Undertaking. Grievance is against the judgment passed by the learned Single Judge holding that the purchaser of the property in an auction conducted in terms of the provisions of the SARFAESI Act, read with the relevant provisions Security Interest (Enforcement) Rules, 2002 (for short, 'the Enforcement Rules') stand on a different footing and that since the Electricity dues of the erstwhile owner/occupier of the premises having not been shown in the sale notice, he is not liable to satisfy the dues of the erstwhile owner/occupier of the premises.
3. The sequence of events and the nature of contentions raised in both the cases are almost similar. The pleadings and proceedings are referred to as given in WA No. 182/2018 (arising from WPC No. 2700/2017) except where it is separately dealt with, dependi
Ahmedabad Electricity Co. Ltd. v. Gujarat Inns Pvt. Ltd. & Others (2004) 3 SCC 587
Haryana State Electricity Board v. Hanuman Rice Mills
Hyderabad Vanaspathi Ltd. v. A.P. State Electricity Board & Others; (1998) 4 SCC 470
Isha Marbles v. Bihar State Electricity Board & Another (1995) 2 SCC 648
M/s Hyderabad Vanaspati Ltd. v. AP SEB [(1998) 2 S.C.R. 620
Mardia Chemicals Ltd. & Others v. Union of India & Others; (2004) 4 SCC 311
Mathew Varghese v. M. Amritha Kumar & Others; (2014) 5 SCC 610
Sanjay Balvantrai Desai & 2 v. Dakshin Gujarat Vij Company Ltd. & 3; AIR 2013 Guj 167
Southern Power Distribution Company of Telangana Limited v. Gopal Agarwal & Others (2018) 12 SCC 644
(1) Duty to supply electricity under Section 43 of 2003 Act is not absolute and is subject to such charges and compliances stipulated by Electric Utilities as part of application for supply of electr....
The auction purchaser is liable for the previous owner's electricity dues under the U.P. Electricity Supply Code 2005, as the statutory provisions impose a duty to verify such dues.
An encumbrance to be a charge must be such a burden on land which, by reason of a statutory provision diminishes value of the land and such a burden, therefore, is capable of being found out on inspe....
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.
The main legal point established in the judgment is that the electricity board cannot claim outstanding dues from the auction purchaser if no charge was created on the property, and electricity dues ....
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