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IN THE HIGH COURT OF GAUHATI, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
Manish Choudhury, J.
M/s Borah and Company – Petitioner
Versus
The Assam Power Distribution Company Ltd. And Ors. – Respondents
WP(C)/989/2014
Decided On : 07-11-2023
Electricity Service Connection - Auction Sale of Property - Assam Electricity Regulatory Commission [Electricity Supply Code and Related Matters] Regulations, 2004 - The court discussed the implications of an auction sale of property on 'as is where is' basis and the liability of the auction purchaser for previous electricity dues. The court referred to the provisions of the Assam Electricity Regulatory Commission [Electricity Supply Code and Related Matters] Regulations, 2004 and the three-Judges Bench decision of the Hon’ble Supreme Court of India in K.C. Ninan vs. Kerala State Electricity Board and others, and concluded that the auction purchaser of a property purchased on 'as is where is' basis is liable for the previous electricity dues.
Fact of the Case:
The petitioner, a partnership firm, purchased a property in an auction sale and applied for a new electricity service connection. The respondent, Assam Power Distribution Company Limited, refused the connection due to outstanding arrear amounts from previous electricity bills.
Finding of the Court:
The court found that the petitioner, as the auction purchaser of the property on 'as is where is' basis, is liable for the outstanding electricity dues from previous bills and dismissed the writ petition. The court directed the petitioner to pay the outstanding dues and ordered the respondent to waive the outstanding interest accrued on the principal dues from the date of the application for electricity supply.
Issues: The main issue was whether the petitioner, as the auction purchaser, is liable for the outstanding arrear amounts from previous electricity bills. The court also considered the implications of the auction sale of property on 'as is where is' basis and the obligations of the auction purchaser.
Ratio Decidendi: The court relied on the three-Judges Bench decision of the Hon’ble Supreme Court of India in K.C. Ninan vs. Kerala State Electricity Board and others, and the provisions of the Assam Electricity Regulatory Commission [Electricity Supply Code and Related Matters] Regulations, 2004 to establish the liability of the auction purchaser for previous electricity dues when purchasing a property on 'as is where is' basis.
Final Decision: The writ petition was dismissed, and the petitioner was directed to pay the outstanding dues. The respondent was ordered to waive the outstanding interest accrued on the principal dues from the date of the application for electricity supply by the petitioner as the auction purchaser.
JUDGMENT :
The present writ petition under Article 226 of the Constitution of India is preferred against a decision conveyed by the respondent Assam Power Distribution Company Limited [APDCL], Dibrugarh vide its Letter bearing no. APDCL/SDE/DESD-III/2011-12/2012/981 dated 03.09.2012, whereby, it has been conveyed to the petitioner that new electricity service connection to the premises of the Dibrugarh Development Authority [DDA] Market, Chowkidinghee cannot be provided due to arrear outstanding amounts, remained to be paid in connection with previous electricity bills.
2. The writ petition has been preferred for setting aside and quashing of the said decision conveyed by the Letter dated 03.09.2012 and the petitioner has sought for a direction to the respondent APDCL authorities to release new service connection to its premises. When the writ petition was moved on 24.02.2014, it was observed, in the interim, that the APDCL authorities shall provide electricity connection to the premises of the petitioner in question immediately, subject to payment of 50% of the outstanding dues, as indicated in the Letter dated 03.09.2012. It was further provided that the amount shall be adjustable, if the writ petition succeeds. As regards the balance 50% of the outstanding dues, the petitioner was directed to furnish an undertaking for payment of the same in case of dismissal of the writ petition.
3. The petitioner is a partnership firm, registered under the Partnership Act, 1932, with its principal place of business at Dibrugarh, Assam.
4. It appears necessary, at this stage, to narrate, in brief, the sequence of events leading to the issuance of the Letter dated 03.09.2012.
4.1. An Auction Sale Notice was published in the English daily newspaper, ‘The Assam Tribune’, in its issue dated 04.07.2011. The said Auction Sale Notice was published by the Recovery Officer of the Debts Recovery Tribunal, Guwahati in connection with O.A. Case no. 06/2005 [Housing & Urban Development Corporation Limited …Certificate Holder vs. Dibrugarh Development Authority & others ….Certificate Debtors].
4.2. The contents of the said Auction Sale Notice dated 04.07.2011 are extracted hereinbelow, for ready reference.
| AUCTION SALE NOTICE DEBTS RECOVERY TRIBUNAL, ASSAM, MEGHALAYA, NAGALAND, ARUNACHAL PRADESH, MANIPUR, MIZORAM, TRIPURA & SIKKIM APSARA BUILDING : DR. B. Baruah Road, Ulubari, Guwahati-781 007. O.A. CASE NO. 06/05 | |||||||||||
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| Housing & Urban Development Corporation Ltd. ……Certificate holder | |||||||||||
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| Dibrugarh Development Authority & Others ...... Certificate Debtors | |||||||||||
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| It is for general information that the under mentioned properties belonging to the certificate — debtors Dibrugarh Development Authority [defaulters/certificate — debtors] above named will be sold in public auction on the date time and place stated herein below on the following terms and conditions :- | |||||||||||
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| [a] The property will not be sold below the reserved price. | |||||||||||
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| [b] Intending bidders are required to make earnest deposit as shown below by way of pay order/demand draft payable at Guwahati favouring the Recovery Officer, DRT, Apsara Building, Dr. B. Baruah Road, Ulubari, Guwahati-781007. | |||||||||||
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| [c] The said deposit will be adjusted in case of successful bidders otherwise refunded on the date of sale itself. | |||||||||||
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| [d] Successful bidder shall deposit 25 % of the sale proceeds by way of pay order/demand draft payable at Guwahati favouring the Recovery Officer, DRT, Guwahati-781007 to be received by him immediately after fall of hammer, failing which the earnest money deposited shall be forfeited. | |||||||||||
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| [e] The purchaser shall deposit the balance 75% of the sale proceeds within 15 days from the date of auction sale. | |||||||||||
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| [f] In any case cheques will not be accepted. | |||||||||||
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An auction purchaser is liable for existing property dues, including electricity arrears, under an 'as is where is' sale, and claims for time-barred debts are unlawful.
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.
(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....
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....
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 ....
Past liabilities of a corporate debtor cannot be imposed on the auction purchaser when seeking a new connection, based on the clean slate principle under insolvency law.
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