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2021 Supreme(Online)(Chh) 2753
CHHATTISGARH HIGH COURT
, J
Chhattisgarh State Power Distribution Company Limited v. Maheshwari Steels and Others
WA No. 182/2018 | WA No. 519/2019
For the Appellants/Petitioners: Shri K.R.Nair, Shri Varun Sharma
For the Respondents: Shri Manoj Paranjpe, Ms. Sharmila Singhai, Shri Kazi
New property owners are obligated to clear electricity dues of previous consumers for obtaining electricity connections, as per statutory provisions and the Supply Code.
Headnote:(A) Electricity Act, 2003 - Sections 56, 43, 50, 173, and 174 - Chhattisgarh State Electricity Supply Code, 2011 - Clause 4.19 - Obligation of new property owners to clear electricity dues of previous consumers prior to restoration of electricity supply - The court explored whether statutory conditions exist mandating new owners to satisfy prior dues for electricity connections - Held that the new owners are liable to pay the dues as per the provisions of the Supply Code concerning new or restored connections. (Paras 1, 35, 46)
(B) Principle of Caveat Emptor - New owners must inquire about utility dues as part of their obligation in property transactions - Rights and conditions under the Supply Code provide the Licensee the authority to recover dues from auction purchasers. (Paras 11, 12, 29)
(C) Duty of Disclosure - The secured creditor in auction sales does not bear the responsibility to inform about prior utility debts as the onus rests on the bidder to ensure due diligence. (Paras 34, 46)
(D) Judicial Precedents - The court referred to landmark decisions addressing the rights of electricity licenses concerning previous consumer debts and the expectations from purchasers in public auctions. (Paras 8, 18, 28, 35)
| Table of Content |
|---|
| 1. validity of electricity dues for property transfer (Para 1) |
| 2. details of the parties involved and context (Para 2 , 3) |
| 3. auction process and liabilities involved (Para 4 , 5 , 6) |
| 4. arguments regarding liability of electricity dues (Para 7 , 10) |
| 5. legal framework governing electricity supply and dues (Para 8 , 9 , 12 , 14) |
| 6. court's analysis of prior judgments and their implications (Para 11 , 13 , 15 , 19) |
| 7. interpretation of laws regarding electricity and property (Para 17 , 20 , 22 , 26) |
| 8. judicial reasoning on obligations regarding previous dues (Para 27 , 28 , 33) |
| 9. analysis of statutory provisions versus precedents (Para 29 , 30 , 31) |
| 10. final outcomes regarding obligations towards electricity dues (Para 32 , 34) |
| 11. order for payment installments regarding electricity dues (Para 35 , 47) |
| 12. final court decision on liability for dues (Para 36 , 46) |
1. Is it obligatory for the purchaser of the premises / property to meet the arrears / Electricity dues of the former consumer for getting a fresh electricity connection or to have the old one restored, when there is no privity of contract, the subsequent purchaser being a stranger?
- What is the nature of the Electricity dues and is it statutory or purely contractual between the Licensee and the Consumer?
- Is there any provision either under the Electricity Act, 2003 (for short 'the 2003 Act') or in the Chhattisgarh State Electricity Supply Code, 2011 (for short 'the Supply Code') or the Chhattisgarh State Electricity Regulatory Commission (Redressal of Grievances of Consumers) Regulations, 2011 (for short 'the 2011 Regulations'), to insist for payment of arrears in respect of the connection given to the premises earlier, from the new owner / occupier of the premises for getting electricity connection?
- If there is any such provision, can the relief be given to the new occupier / owner for getting absolved from the liability without challenging the vires of the said provision and getting it declared ultra vires?
- If there is any such stipulation in the 'Supply Code' framed by the Regulatory Commission of the State, in exercise of the power under the 2003 Act, will it not become 'part of the statute'?
- Is there any difference between the owner of the property / premises who purchased the same in an 'auction proceedings' under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the SARFAESI Act') and any other person who goes for 'negotiable purchase', with reference to the satisfaction of the Electricity dues of the erstwhile owner / occupier of the property?
- Can the Electricity supply / connection provided by the Licensee under the Act 2003 / Supply Code / 2011 Regulations to the consumer be regarded as a 'secured asset' or 'property', to be dealt with under the SAR - FAESI Act?
- If the Secured Creditor has sold the property in 'as is where is' and 'as is what is' condition, but for the known encumbrances mentioned in the sale notice and alerting that statutory dues and such other payments shall be the look out of the purchaser, can the purchaser turn around and allege any lapse on anybody else in this regard?
- Can the Licensee / Distributor who has effected the Electricity supply and not connected with the sale proceedings under the SARFAESI Act, be found fault with for the lapse if any, on the part of the Secured Creditor in mentioning or non - mentioning the encumbrance / Electricity dues in the sale notice?
- What is the scheme for supply of electricity under the 2003 Act / Supply Code / 2011 Regulations, when the connection is intended to be given to the "premises" and not to the individual, who can either be owner or occupier?
- How to reconcile with the various judgments rendered by the Apex Court in this regard, at different points of time?
These are the questions that are germane to the subject - matter of challenge involved in these appeals.
2. The above appeals have been prefer
