Directors of a company are not personally liable for the company’s dues unless there is a personal guarantee or specific provision implicating them.

1. We have heard Sri Rohit Agarwal for the petitioner. Sri Pankaj Kumar Shukla appears for the U.P. Power Corporation Ltd through Executive Engineer, Distribution Division, Bijnor.

2. The petitioner was a Director of the U.P. Lime Chem. Ltd - a public limited Company registered under the Companies Act 1956, with its registered office situated at Haridwar Road, Bijnor.

3. The Company entered into an agreement with the Executive Engineer, Electricity Distribution Division - I Bijnor on 22.2.1990, for supply of 335 KVA electricity load. The agreement was signed by the petitioner as a director of Company. Clause 13 of the agreement provided that any notice by the supplier to the consumer shall be deemed to be duly given and served, if it is addressed to the consumer and delivered by hand at, or sent by registered post to the address specified in the consumer's application or as subsequently notified to the supplier. Clause 14 provides that consumer shall pay in advance an estimated amount to be intimated by the supplier to the cost of providing and installing the line, connecting mains and apparatus excluding transformer and O.C.B payable by the supplier but such line, mains and apparatus shall remain the property of the supplier, even though the cost thereof has been paid by the consumer. The agreement does not define the consumer or imposes any personal liability on the director of the company.

4. It is stated that the directors of the Company have not given any personal guarantee, or undertaking to pay the amount due from the Company as a consumer to the Power Corporation.

5. It is alleged that electricity connection was given in the year 1990, to the factory of the Company for running a plant for manufacture of calcium carbonate. Since the Company did not pay the bills, a notice dated 30.6.2001, under S.3 of U.P. Government Electricity Undertaking (Recovery of Dues) Act 1958, was issued to the petitioner, raising a demand of Rs.19,91,351.30. The petitioner filed objections to the notice sent to him alleging that he is only a Director of the Company, and is not liable to pay the outstanding dues of the Company. After two years, the petitioner received a citation dated 8.5.2003, for a sum of Rs.15,41,685/-, as electricity dues, without giving the break - up.

6. Sri Rohit Agarwal, learned counsel for the petitioner submits that the 'consumer' is defined under clause 2 (b) of the Electric Supply (Consumers) Regulations 1984, as follows: -
"2 (b): 'consumer' means any person who is supplied with energy by the Board and include any person whose premises are for the time being connected with the works of the board for the purpose of receiving electrical energy and also includes an intending consumer and a consumer who has been disconnected."

7. Sri Agarwal submits that the demand was raised prior to enforcement of Electricity Act 2003, and the notification of U.P. Electricity Supply Code 2005. The 'consumer' in the present case would be the 'Company' and not the 'Directors of the Company', who are not liable personally for payment of any amount due to the electricity department. He further submits that even under the Electricity Act 2003, the word 'consumer' is defined as a person who has been supplied with electricity for his own use, or the Government and that the 'consumer' in such a case would be the Company and not the directors, who are not personally liable for the dues of the Company.

8. S.2 (15) of the Electricity Act, 2003 , defines 'consumer' as follows: -
"(15) "consumer" means any person, who is supplied electricity for his own use by a licensee or the Government or by any other person engaged in the business of supplying electricity