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2009 Supreme(MP) 166
INDORE BENCH
VINEY MITTAL, J.
M. P. Paschim Kshetra Vidyut Vitran Company Ltd. – Appellant
Vs.
Electricity Consumer Grievances Redressal Forum & Anr. - Respondent
W. P. No. 147 of 2009.
Decided on :- 6-2-2009
Surjeet Singh, Sr. Counsel with S. S. Chouhan and D. S. Pawar, for Petitioner;
Vivek Dalal, for Respondent No.2.
The main legal point established in the judgment is the protection granted to a purchaser from an official sale, as per the exceptions in Clause 4.17 of the M.P. Electricity Supply Code, 2004, and the interpretation of relevant legal provisions from previous cases.
Headnote:
Electricity Dues - Dispute over New Connection - Sick Industrial Company (Special Provision) Act, 1984 - M.P. Electricity Supply Code, 2004 - Isha Marbles v. Bihar State Electricity Board (1995) 2 SCC 648, Ahmedabad Electricity Co. Ltd. v. Gujarat Inns Private Limited, (2004) 3 SCC 587 : (AIR 2004 SC 2171), Dakshin Haryana Bijli Vitran Nigam Limited v. Paramount Polymers Private Limited (2006) 13 SCC 101: (AIR 2007 SC 2) - Interpretation of Clause 4.17 of the Code - Protection to Purchaser from Official Sale - Liability for Outstanding Dues
Fact of the Case:
The dispute arose from the refusal of the Vitran Company to grant a new electricity connection to the applicant-Company, M/s. R. K. Ferro Alloys Private Limited, due to outstanding dues recoverable from the previous consumer, M/s. Quality Steel and Forgings Limited. The applicant-Company purchased the property from M/s. Choudhary and Sons Forgings Private Limited, who had acquired it through an official sale by the Official Liquidator of Calcutta High Court. The court analyzed the provisions of the Sick Industrial Company (Special Provision) Act, 1984, and the M.P. Electricity Supply Code, 2004, and considered the interpretations of relevant legal provisions from the cases of Isha Marbles, Ahmedabad Electricity Co. Ltd., and Dakshin Haryana Bijli Vitran Nigam Limited.
Finding of the Court:
The court found that the purchaser from an official sale, as in the present case, is protected from the liability of outstanding dues of the previous consumer, as per the exceptions in Clause 4.17 of the Code. The court also emphasized the protection granted to a purchaser through an official sale and the public policy behind it. The court held that the outstanding dues cannot be made recoverable from the present applicant-Company and dismissed the petition filed by the Vitran Company.
Issues: The main issue was whether the Vitran Company could refuse a new electricity connection to the applicant-Company based on outstanding dues of the previous consumer, and the interpretation of Clause 4.17 of the M.P. Electricity Supply Code, 2004.
Ratio Decidendi: The court interpreted Clause 4.17 of the Code and emphasized the protection granted to a purchaser from an official sale. It held that the outstanding dues cannot be made recoverable from the present applicant-Company, and the Vitran Company should continue with the proceedings before the Official Liquidator of Calcutta High Court, if still pending.
Final Decision: The court dismissed the petition filed by the Vitran Company and directed it to comply with the order issued by the Consumer Forum to release the electricity connection to the applicant-Company, M/s. R. K. Ferro Alloys Private Limited.
This order shall dispose of three writ petitions being W.P. No. 147/ 2009, W.P. No. 6337/2008 and W.P. No. 7555/2008, as all the three with petitions have arisen out of common proceedings/ orders passed by the Electricity Consumer Grievances Redressal Forum, Indore (hereinafter referred to as Consumer Forum), and pertain to a controversy between M. P. Paschim Kshetra Vidyut Vitran Company Limited, (hereinafter referred to as Vitran Company) and the Company M/s. R. K. Ferro Alloys Private Limited, (hereinafter referred to as the applicant-Company). Whereas two writ petitions. W.P. No. 7555/ 2008 and W.P. 6337/2008 have arisen out of the interim orders passed by the Consumer Forum Writ Petition No. 147/2009 has arisen out of a final order passed by the Consumer Forum, whereby the application/ complaint filed by the applicant-Company has been allowed. As a matter of fact, on passing of the final orders by the Consumer Forum, the two writ petitions, W.P. No. 7555/2008 and W.P. 6337/2008, have been practically rendered infructuous.
2. Hereinafter, the parties would be referred as petitioner and respondent, as per their status in W.P. No. 147/2009.
3. The petitioner-Vitran Company is a successor in interest of M.P. Electricity Board. On February 6, 1991, the Electricity Board entered into an HT agreement, for supply of electric energy with one M/s. Quality Steel and Forgings Limited. Later on, through another arrangement between the Board and the aforesaid Company on March 29, 1991, the entitlement of the said Company was enhanced to 5000 KVA. It appears that the monthly bills issued to the aforesaid M/s. Quality Steel and Forgings Limited by the Board, remained unpaid from April, 1991 till June 1998. On account of the said default, the electricity connection of the said company was temporarily disconnected on June 26, 1998.
4. It also appears from the record that the aforesaid dispute became a matter of adjudication before the Board for Industrial and Financial Reconstruction (BIFR), under the provisions of Sick Industrial Company (Special Provision) Act, 1984. On April 24, 2000, the BIFR recorded an opinion, that it was just and equitable to initiate winding up proceedings against the said Company. Consequently, the winding up proceedings were initiated against the said Company, before the Calcutta High Court. An official Liquidator was appointed in the matter by the said Court. When the aforesaid winding up proceedings were pending before the Calcutta High Court, and even the Official Liquidator had been appointed, the petitioner-Vitran Company lodged a claim of Rs. 6.43 Crores against the aforesaid Company, Mi/s. Quality Steel and Forgings Limited, before the official Liquidator on May 20,2002. There is no indication on record, as to how, and in what manner, the said claim lodged by the Vitran Company, was ever processed.
5. However, on January 12, 2007, the Company Judge of Calcutta High Court ordered the sale of leasehold rights, plant and machinery of Ms. Quality Steel and Forgings Limited. The sale of the aforesaid property/rights was sanctioned in favour of one M/s. Choudhary and Sons Forgings Private Limited, Jhabua, for a sum of Rs. One Crore. It would be relevant to notice that the aforesaid plant and machinery of the said Company in liquidation was situated at Industrial Area, Meghnagar, district Jhabua (MP). The said sale by the official Liquidator in favour of M/s. Choudhary and Sons Forgings Private Limited attained finality.
6. According to the applicant-Company, M/s. R K. Ferro Alloys Private Limited, some talks/negotiations for purchase of the aforesaid property of M/s. Choudhary and Sons, ensued between the applicant and the said Company. Consequently, through an application, filed on April 9, 2008, the applicant-Company approached the Vitran-Company, for grant of a new electricity connection. It also appears from the record that the applicant purchased the aforesaid property of M/s. Choudhary and Sons Forgin
