Back
IN THE HIGH COURT OF KERALA AT ERNAKULAM
SHAJI P.CHALY, J.
G.Nagendran Bharat Wheat Product(P) Ltd – Appellant
Versus
Kerala State Electricity Board – Respondent
WP(C) No. 17619 of 2011
Decided on : 14-10-2022
Constitution of India,1950 - Article 19(1)(g) - Indian Limitation Act, 1963 - Article 62 - Kerala Electricity Duty Act, 1963 - section 5 - Electricity Act, 2003 - Section 56 - Kerala State Electricity Board Terms and Conditions of Supply, 2005 - Kerala State Electricity Supply Code, 2005 - Kerala Electricity Supply Code, 2014 - Companies Act, 1956 - Kerala Electricity Duty Rules, 1963 - Rule 4 - Collecting and payment of electricity duty levied on consumers – Disconnection of supply in default of payment - Dues from a consumer created a first charge on the amounts recoverable for the energy consumed, and the District Collector was empowered to take steps to recover the amounts from the licensees respectively, as an arrear of land revenue –Whether Kerala State Electricity Board was a party to said proceedings and accordingly, petitioner has produced orders, judgment, copy of sale deed and report of official liquidator along with I.A - there cannot be any doubt or dispute that a provision of law must expressly provide for an enforcement of a charge against the property in the hands of the transferee for value without notice to the charge and not merely create a charge. (Para 20).
Findings of the Court :
It can be seen that dues of a previous consumer so far as Terms & Conditions of Supply, 2005 is concerned, it is not merely a contractual dues but a statutory dues creatin first charge over the property; and no doubt, amount so made consequent to failure on part of previous consumer to pay electricity dues runs with property - It is also equally important and significant to note that Kerala State Electricity Board was not a party in winding up proceedings - Further, sale deed executed in favour of petitioner would show that property was sold as stated above “as is whereas and whatever there is” condition - Above all it is specific contention of petitioner that power supply to property in question was disconnected and it was accordingly that petitioner has submitted an application for a fresh connection - It is also relevant to note that liquidator notified auction sale of the property in “as is where is ……” condition, and therefore it can only be legally presumed that petitioner had made due enquiries as to condition of property and should have been aware of electricity charges due from previous consumer
Result: Petition dismissed
JUDGMENT :
Petitioner is the Managing Director of a private limited company registered under the Indian Companies Act, 1956 having its office at Edayar, Ernakulam District. The petitioner had responded to a notification issued by the official liquidator, High Court of Kerala, regarding the sale of some of the assets of a company in liquidation viz., M/s.A.M.A Food Products (P) Limited in Company Petition No.11/2003. The petitioner was a successful bidder as regards Lot No.5 and the sale was confirmed in favour of the petitioner, evident from Exhibit P1 communication dated 14.6.2010 issued by the official liquidator for an amount of Rs.1,62,88,000/-(Rupees One Crore Sixty Two Lakhs and Eighty Eight thousand only) and directed the petitioner to pay the entire balance amount due.Petitioner had made the payment and consequently, the immovable and movable assets of the company in liquidation were handed over to the petitioner by the official liquidator as per Exhibit P2 proceedings dated 2.12.2010. The assets purchased and handed over consisted of land, factory building and machinery of the company in liquidation, which were used to operate a flour mill. The challenge in the writ petition is against Exhibit P3 demand raised by the 2nd respondent-Assistant Engineer K.S.E.B Ltd, towards electricity dues from the previous owner.
2. According to the petitioner, the petitioner along with another shareholder, had incorporated a private company in the name and style, “Bharat Wheat Products (P) Ltd.,” for the purpose of operating a flour mill at the purchased premises. While so, petitioner realised that there is no electricity connection in the premises in question and therefore, he made an application for power connection to the Assistant Engineer, Electrical Section, Kerala State Electricity Board – the 2nd respondent, however, no action was initiated and on enquiry, petitioner was informed by the 2nd respondent that there were arrears of electricity charges amounting to Rs.36,70,200/-(Thirty six lakhs seventy thousand and two hundred) from the company in liquidation and that, power connection could not be given to the premises unless such arrears were cleared.
3. It seems when the petitioner requested for a written communication, Exhibit P3 dated 27.6.2011 was issued to the petitioner stating that an amount of Rs.36,70,200/-is remaining due from the previous consumer and therefore the application for power connection submitted by the petitioner is kept pending for instruction from the higher authorities. It is thus challenging the legality and correctness of the said intimation, the writ petition is filed.
4. When the matter came up for hearing on 23.09.2022, petitioner was directed to produce the entire records relating to the winding up proceedings in order to ascertain as to whether the Kerala State Electricity Board was a party to the said proceedings and accordingly, the petitioner has produced orders, judgment, copy of sale deed and report of the official liquidator along with I.A.No.1 of 2022.
5. I have heard, learned counsel for the petitioner Sri.C.K.Karunakaran, learned Standing Counsel for the Board Sri.Josvin Thambi Kunnath and perused the pleadings and material on record.
6. The paramount contention advanced by the learned counsel for petitioner is that Exhibit P3 intimation issued by the Electricity Board is illegal, without jurisdiction, arbitrary and contrary to the statutory provisions and therefore, unconstitutional since it infringes the fundamental rights of the petitioner. It is also submitted that the respondents are duty bound to act in consonance with the statutory and constitutional provisions and in compliance with the principles of natural justice. That apart, it is submitted that the demand raised is illegal and not liable to be paid by the petitioner. It is also contended that Regulation 12 of the Supply Code 2005 and Regulation 7 of the Terms and Conditions of Supply stipulate that, if purchase of a premises requ
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....
(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....
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 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.
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 ....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
