The court affirmed that procedural flaws and violations of natural justice necessitate judicial intervention, allowing for the reconsideration of a Certificate Officer's order on liability despite delays in contesting the decision.

JUDGMENT :

S.K. Mishra, J.

1. The writ petition has been preferred assailing the Order dated 09.02.2023, so also Order dated 06.07.2023 passed by the Certificate Officer (Opposite Party No. 5) in Certificate Case No.01 of 2023, vide which the arrear electricity duty amounting to Rs.40,49,15,126/- was held to be recoverable from the Certificate Debtor, i.e., the Petitioner- Company, for alleged non-payment of dues pertaining to electricity duty relating to its Power Plant at Bijayachandrapur, Paradeep. That apart, the Certificate of Public Demand dated 09.02.2023, Demand Notice dated 20.07.2023 and Demand Notice dated 04.11.2023, and other consequential Demand Notices issued thereafter are also under challenge. The Petitioner also seeks for a direction to the Opposite Parties to consider and decide its representation dated 10.07.2023, seeking waiver from further proceedings.

2. The factual matrix involved in the present lis, as detailed in the writ petition, is that the electricity duty is allegedly outstanding against the Petitioner, particularly for the period prior to 29.01.2021, following the acquisition of the generating assets of M/s Essar Power Orissa Ltd., shortly hereinafter “EPOL”, by the Petitioner-Company under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, shortly, “SARFAESI Act”. The Petitioner has no liability towards any electricity duty prior to its acquisition of the assets on 29.01.2021. The Opposite Parties’ claim is both legally unsustainable and procedurally flawed. The generating asset, previously owned by Opposite Party No. 6 (EPOL), was auctioned via notice dated 03.12.2020. The Petitioner became the successful bidder and was issued a Sale Certificate on 29.01.2021. Therefore, all electricity dues prior to 29.01.2021 were the liability of EPOL, not of the Petitioner.

2.1. The Principal Chief Electrical Inspector (OP No.2) wrote to EPOL (OP No.6), not the Petitioner, calling upon it to make good the outstanding dues for the pre-sale period, thus confirming that EPOL was the liable entity. The impugned actions of the Collector-cum-Certificate Officer, Jagatsinghpur (OP No- 5) reflect a biased approach and a failure to apply judicial mind to the facts and the law, rendering the actions arbitrary. Opposite Party No.5 erroneously presumed the Petitioner’s admission of liability under the Odisha Electricity Duty Act, shortly, the “OED Act”, by relying on initial attempt of the Opposite Party No. 6 to apply for a One-Time Settlement (OTS) under the Scheme of Opposite Party No.1, which was alleged to be made by the Petitioner. However, the application for OTS by the Opposite Party No.6 was rejected for non-compliance of certain conditions. Further, the Petitioner never admitted any liability for the period prior to 29.01.2021. The Opposite Party No. 5 also failed to provide the Petitioner an opportunity to present a defense against the alleged liability, which amounts to violation of the principles of natural justice. The reasoning given by Opposite Party No. 5 that the Petitioner failed to settle the certificate amount, after being given opportunities, is based on a false premise that the Petitioner was liable, and such reasoning is unsustainable.

2.2. Further, Opposite Party No. 5’s reliance on Section 5A of the OED Act is misplaced, as the acquisition of the generating asset by the Petitioner did not involve a voluntary transfer of assets from EPOL. The SARFAESI Act provides for a statutory sale and confers a clear and unencumbered title to the Purchaser, free of any encumbrances, including electricity duty obligations. Section 5A of the OED Act applies only to voluntary sales, not statutory sales by virtue of auction under SARFAESI and hence, it is not applicable in this case. The Opposite Parties themselves acknowledged in communications dated 01.07.2021, 09.07.2021 and 30.12.2021 that the liability pertains to EPOL. Vide letter dated