HON'BLE SRI JUSTICE U.DURGA PRASAD RAO
I.A.No.1 of 2021
in
Writ Petition No.24461 of 2021
ORDER:
The petitioner prays to direct 2nd respondent to release the power supply to the petitioner in pursuance of the sanctioned order issued in Lr.No.SE/O/NLR/EE-T/DEE-C/F/D No.C1828/21 dated 16.08.2021 forthwith pending disposal of W.P.No.24461/2021.
2. W.P.No.24461/2021 is filed by the petitioner declaring the action of 2nd respondent in not releasing power supply to the petitioner even though the conditions mentioned in the sanctioned order in Lr.No.SE/O/NLR/EE- T/DEE-C/F/D No.C1828/21 dated 16.08.2021 were complied with by the petitioner as illegal and arbitrary and for a consequential direction to 2nd respondent.
3. The case of the petitioner succinctly is thus:
The petitioner is a partnership firm and purchased the property i.e., land, building, plant and machinery of M/s. Om Sri Sai Ferroy Alloys Private Limited (OSSFAPL) located at Sy.No.298, Thimmanagaripalem Village, Chillakur Mandal, SPSR Nellore District pursuant to the auction conducted by the State Financial Corporation (SFC) as per the auction notification dated 16.03.2020. After purchase of the property, the petitioner made an application to the Distribution Company for release of power supply and the respondents have informed that there are electricity dues of OSSFAPL and unless the dues of the previous customer are paid, the power supply would not be released to the petitioner‟s premises. As those dues 2 were on higher side and payment of such huge amount would not be financially viable for the petitioner firm, the petitioner has decided to locate the unit at a different place and has purchased the land in Sy.Nos.259 and 259-A of Thimmanagaripalem Village, Chillakur Mandal, SPSR Nellore District. After obtaining necessary approvals, the petitioner made an application to the Distribution Company for release of power supply to the proposed unit in Sy.Nos.259 and 259-A of Thimmanagaripalem Village, Chillakur Mandal, SPSR Nellore District with a contracted maximum demand of 2,600 KVA and the said application was given registration No.31111H327102021MAR03 dated 03.03.2021. Thereafter, the petitioner made number of representations to the respondents for release of power supply to the proposed new unit as the petitioner has already expended about Rs.5.00 Crores for establishment of the unit. In spite of his representations, the respondents did not release the power supply on the sole ground that the petitioner purchased the machinery in public auction belonging to OSSFAPL and the machinery is being used for the proposed new unit. Hence, the petitioner filed W.P.No.10859/2021 before this Court. When the matter came up for hearing, the petitioner was informed by the office of 1 st respondent that the proposals were sent by the Superintending Engineer dated 14.07.2021 for release of power supply to the petitioner and the estimate was prepared and respondent No.2 was directed to collect the documents and undertaking from the petitioner‟s firm for withdrawal of the Court case before releasing the service. The 2nd respondent issued a letter in SE/O/NLR/EE-T/DEE-C/F/D No.C1828/21 dated 16.08.2021 intimating the amounts to be paid before execution of the work. In pursuance thereof, the petitioner has withdrawn the writ petition and the same was dismissed on 3 17.08.2021. Pursuant to the proceedings of 2nd respondent, the petitioner paid development charges of Rs.33,88,588/- on 18.08.2021, security deposit of Rs.39,00,000/- on 17.09.2021 and submitted other compliances on 05.10.2021 and requested the respondents to release the power supply. Though the entire amount as demanded by the Distribution Company was paid and necessary certificates were produced for release of the power supply, the 2nd respondent has not so far released the power supply to the petitioner which is illegal and untenable. The petitioner made several representations dated 21.09.2021, 25.09.2021 to the Executive Engineer and dated 05.10.2021 to the Superintending Engineer and dated 11.10.2021 to 1st respondent, but of no avail.
Hence, the writ petition.
4. The 2nd respondent filed counter on behalf of the respondents and contending thus:
(a) Firstly, it contended that the writ petition is not maintainable in view of the availability of efficacious and alternate remedy before the Consumer Greivance Redressal Forum (CGRF) at Tirupati as per condition No.14.4 & 14.8 of General Terms and conditions of Power Supply (GTCS). It is further contended that on the complaint of P.Rajkumar Reddy to the Andhra Pradesh Electricity Regulatory Commission (for short, „APERC‟), a detailed report was called for from 1st respondent under the provisions of the CGRF, Vidyut Ombudsman and Consumer Assistance Regulations, 2016 and report was submitted and the same is pending for consideration before the APERC and therefore, writ petition is not maintainable. 4
(b) Initially, the respondents did not know that the petitioner has purchased the unit of OSSFAPL in public auction. However, the said fact came to the notice of the respondents after filing of W.P.No.10859/2021 by the petitioner. When one P.Koti Reddy representing petitioner firm approached the respondents seeking supply of electricity for the abutting premises by utilizing the machinery which they have got purchased in auction, the same was denied since there are outstanding arrears of more than Rs.9.00 Crores in the name of OSSFAPL. The petitioner filed W.P.No.10859/2021 challenging the action of the respondents in not supplying the power and appropriate defence was placed on record by way of counter affidavit. For the reasons best known to the petitioner, he has withdrawn the writ petition.
(c) Nextly, while admitting that the respondents addressed letter dated 16.08.2021, it is however contended that the respondents came to know that one P.Raj Kumar Reddy made a complaint stating that OSSFAPL established the petitioner firm through P.Koti Reddy and others and therefore, the petitioner firm is benami for OSSFAPL. Therefore, the respondents have engaged a team of Engineers to enquire into those facts. The Chief Vigilance Officer completed the internal enquiry over the issue of benami transactions and concluded in his report that to evade the legal dues to the respondents, OSSFAPL and the petitioner colluded together and committed cheating. Apart from that B.Surendar Reddy on behalf of OSSFAPL made a request to the respondents for settlement of outstanding arrears of Rs.9,71,91,151/- through one time settlement for the HT SC No.NLR422 which stands in the name of OSSFAPL. In view of these facts, the petitioner has withdrawn the W.P.No.10859/2021. It is further 5 contended that as per the law laid down by the Hon‟ble Apex Court, it is the liability of the auction purchaser to clear the outstanding dues of the electricity and the APSPDCL is well within its right to demand the arrears due by the auction purchaser accrued from the previous owner. It is further contended that already the District collector, Nellore has initiated proceedings under the Revenue Recovery Act vide OLNLR/DSED/237/2018 SA(DS) REV COL dated 07.12.2018 and served Form 1, 2 and 3 against OSSFAPL by seizing its plant, building, machinery and structures and also issued directions to Tahsildar, Chillakur Mandal to auction the property. In that view, the petitioner‟s act of shifting the plant, building, machinery and structures unauthorizedly amounts to illegal conspiracy. The contention of the petitioner that the petitioner is a new plant is totally false. The petitioner has shifted the plant and machinery equipment from the old premises i.e., OSSFAPL to the adjacent premises purchased to evade payment of dues and registered under another application on 03.03.2021. Hence, the petitioner being successful bidder is liable to pay dues of previous owner to respondents and therefore, the writ petition is liable to be dismissed.
5. Heard the arguments of Sri O.Manoher Reddy, learned counsel for petitioner, and Sri Y.Nagi Reddy, Standing Counsel for the respondents.
6. Both the counsel reiterated their respective pleadings in their arguments.
7. While it is the submission of the petitioner that the petitioner firm is only a purchaser of the plant and machinery and other assets of OSSFAPL in public auction conducted by the SFC and except that it has nothing to do 6 with the said company and after purchase of the unit the machinery was relocated at different place in Sy.Nos.259 and 259-A of Thimmanagaripalem Village, Chillakur Mandal, SPSR Nellore District and after obtaining necessary revenue permits, the petitioner filed an application to the Distribution Company for release of the power supply at a contracted maximum demand of 2600 KVA and in view of the non-response from the respondents, the petitioner filed W.P.No.10859/2021 and on their promise that the petitioner‟s request for supply of power was under consideration and power would be supplied if he withdraws his writ petition, the petitioner has withdrawn W.P.No.10859/2021 and later the 2nd respondent issued letter dated 16.08.2021 informing the petitioner about the amounts to be paid before the execution of the work and accordingly, the petitioner deposited the development charges, security deposit and other amounts necessary for release of the power supply and in spite of the petitioner‟s due compliance of the instructions and directions of the respondents, it is argued, the respondents have not supplied the power on an untenable argument that petitioner is a benami of the OSSFAPL and the petitioner is liable to clear the dues of the said former company.
8. In oppugnation, the contention of the respondents is that the petitioner is not a new firm or company, but it is only a benami company of OSSFAPL and since the petitioner purchased the unit of the OSSFAPL, the petitioner, under law laid down by the Hon‟ble Apex Court, is obligated to discharge the liabilities of OSSFAPL and when the respondents demanded the petitioner to pay the said amount for release of power, OSSFAPL has stealthily relocated the unit at different place under the guise of forming a 7 new unit and applied for energy. Thus it is the vehement contention of the respondents that the petitioner is liable to pay dues of OSSFAPL of more than Rs.9.00 Crores before seeking power supply from the respondents.
9. I gave my anxious consideration to the above respective arguments. The material papers filed along with writ petition by the petitioner contain the copy of the Memo No.CGM/O&M/GM/EE/C/F.e-257720/D.No.1182/21 dated 06.08.2021 issued by the Chief General Manager / O & M, APSPDCL, Tirupati. This memo shows that the Superintending Engineer/ Operation / Nellore - 2nd respondent submitted a proposal for extension of new HT service connection to the petitioner firm at an estimated cost of Rs.17,90,587/-. The proposal is for release of HT service connection for CMD of 2600 KVA potential. The Superintending Engineer also mentioned the amounts under various heads to be collected from the consumer / writ petitioner. The Memo reads that on careful consideration of the proposals, it was instructed to the Superintending Engineer / 2nd respondent to collect the memo mentioned documents from the petitioner and also an undertaking from the petitioner for withdrawal of the Court case in W.P.No.10859/2021 for release of the supply. The Superintending Engineer was ultimately requested to take up the work under turnkey basis by following certain conditions enumerated in the memo. Pursuant to the said memo, the Superintending Engineer / 2nd respondent addressed a letter in SE/O/NLR/EE-T/DEE-C/F/D No.C1828/21 dated 16.08.2021. While referring the memo addressed by the Chief General Manager, O & M, APSPDCL, Tirupati, the 2nd respondent informed to the petitioner that the proposal for issue of service connection for CMD of 2600 KVA with 8 connected load of 2600 KW at 33 KV potential under HT Cat-3C to the petitioner firm was sanctioned under turnkey basis. The 2nd respondent in his letter requested the petitioner to pay an amount of Rs.33,88,588/- under two heads i.e., the development charges of Rs.31,20,000/- and administrative overhead charges of Rs.2,68,588/- payable through Demand Draft from a nationalized bank. In his letter he has further stated that the petitioner has to follow the following conditions.
1. The consumer is requested to submit the following documents and an undertaking letter for withdrawal of court case filed before releasing of the service:
a) Land conversion approved documents from Revenue department is to be submitted for 2Nos. Sale deeds enclosed as proof of ownership documents.
b) NUDA approvals from NUDA authorities for 2 Nos. Sale deeds enclosed as proof of ownership documents.
c) Registered Partnership documents is to be submitted.
2. It is the responsibility of the concerned Executive Engineer / Operation and Deputy Executive Engineer / Operation to look over the quality of the work.
3. It is the responsibility of the Executive Engineer / Construction / Nellore to check measure the materials at the site before commencement of the said work duly collecting the bills for all the materials.
4. The original purchase bills shall be submitted to the concerned Executive Engineer / Operation.
5. The work is to be executed by the approved contractors of APSPDCL, duly following all other departmental procedures in vogue.
6. Further you are requested to pay the above amounts within one month from the date of this letter otherwise your application will be deleted without any further notice and the work under Turnkey basis will be valid upto 3 months only. Hence the consumer is requested to complete the Turnkey work within the time frame otherwise the approval will be invalid and 9 a fresh application has to be registered for further course of action.
(a) Thus, the above memo and letter of 2nd respondent would depict that on two main conditions the respondents agreed to release the power with connected load of 2600 KW at 33 KV potential to the petitioner unit. Firstly, on the condition of the petitioner depositing the amounts enumerated in the memo and letter and secondly the petitioner shall withdraw the pending Court case i.e., W.P.No.10859/2021. The other conditions are incidental to the supply of power and they are not germane for our discussion. According to the petitioner, he duly followed the instructions contained in the letter dated 16.08.2021 and deposited the amounts. It should be noted that in para 6 of the counter, the respondents admitted the factum of addressing letter dated 16.08.2021 to the petitioner for release of power and the respondents also admitted that the petitioner paid the amounts on receiving the aforesaid letter. It is important to note that neither in the Memo dated 06.08.2021 nor in the letter dated 16.08.2021, it was mentioned that the petitioner is only a benamdar of OSSFAPL and that unless he deposits the amount payable by the former company, his request for supply of power cannot be considered. In the counter, for the first time, the respondents raised that plea and also contended that in view of the judgment of the Hon‟ble Supreme Court in Civil Appeal No.1815/2020 dated 01.06.2020 [Telangana State Southern Power Distribution Company Limited v. M/s. Srigdhaa Beverages], the petitioner being purchaser of the unit of OSSFAPL, it is liable to pay electricity consumption dues of OSSFAPL.
10
10. It should be noted that at this juncture, this Court is only considering the interlocutory application which is filed for a direction to 2nd respondent to release the power supply to the petitioner pending writ petition. The Court is aware of the fact that the averments and counter averments made by both parties require a detailed hearing for resolution in accordance with law. Therefore, at this juncture, a detailed discussion cannot be made with regard to the relevant issues i.e., (1) whether the petitioner firm is a benamdar of OSSFAPL? (2) whether the petitioner being the auction purchaser of the unit of OSSFAPL, liable to pay the electricity consumption dues of the said company? However, only a peripheral observation to the extent required can be made.
11. So far as the first issue is concerned, the respondents along with its counter filed certain material papers which contain copy of the Vigilance Report dated 03.07.2021 forwarded by the Inspector of Police, Vigilance & A.P.T.S. P.S, Nellore to the Joint Managing Director, Vigilance & Security, AP Transco, Vijayawada, wherein, with regard to certain allegations made against M/s. Om Sri Sai Ferro Alloys and the writ petitioner, he conducted enquiry and forwarded the said report. The allegation No.2 is to the effect that the company of OSSFAPL was auctioned by the A.P. State Financial Corporation and unit was taken over by M/s. Sri Venkateswara Ferro Alloys (writ petitioner), benami company of the respondent floated by Sri P.Kotireddy and others. In respect of this allegation, the finding of the Inspector of Police, Vigilance & A.P.T.S. P.S. is as follows:
"In view of the above, it is clear that the company of M/s. Om Sri Sai Ferro Alloys was auctioned by APSFC and the unit was taken over by M/s. Sri Venkateswara Ferro Alloys. The petitioner has mentioned the above allegation was true. But there is no specific evidence available to 11 prove that M/s. Venkateswara Ferro Alloys is a binami company of the respondent."
It is true that the effect of the above report requires to be heard during the course of arguments in the main writ petition. However, the above finding prima facie shows that there is no specific evidence to prove that the writ petitioner is a benami company of M/s. Om Sri Sai Ferro Alloys.
12. So far as the second issue relating to the liability of the petitioner to pay the electricity consumption charges of OSSFAPL is concerned, in the decision of the Hon‟ble Supreme Court in Telangana State Southern Power Distribution Company Limited's case (supra), the question before the Apex Court was whether the auction purchaser (a unit owned by M/s. SB Beverage Private Limited) was liable to discharge the previous electricity dues of the last owner. In that context, taking into consideration the e- auction notice in question wherein the existence of the electricity dues, whether quantified or not, has been specifically mentioned as a liability of the purchaser and also, as the sale was on "AS IS WHERE IS, WHATEVER THERE IS AND WITHOUT RECOURSE BASIS", the Hon‟ble the Apex Court observed that the auction purchaser is liable to pay the electricity dues of the previous owner.
13. In the instant case, at this stage, this Court has no advantage of seeing the auction notification issued by the A.P. State Financial Corporation, basing on which the writ petitioner purchased the unit of OSSFAPL. Neither party produced the auction notification and conditions of the auction. Therefore, at present it is not possible to decide whether the petitioner is liable to pay electricity dues of the previous owner. 12
14. Therefore, at the outset, the two important issues raised by the respondents in its counter are concerned, they have to be resolved only after hearing the arguments in the main writ petition, but not at this stage. As the matter stands, the prima facie there is no material to show that the petitioner is a benamdar of OSSFAPL. If the impasse were to be continued, the respondents will lose its revenue and petitioner for want of electricity, cannot start production, which in my considered view, is not good for either. Therefore, in the interests of justice it is apposite to direct the respondents to release the electricity power to the petitioner as requested by him and as mentioned in the letter dated 16.08.2021 addressed by 2nd respondent to the petitioner on the condition of the petitioner depositing (1) usual charges as claimed by the respondent authorities, which if he has not already deposited and (2) 10% of the electricity consumption charges due from M/s. Om Sri Sai Ferroy Alloys Private Limited to the respondents within a specified time to show its bonafides.
15. Accordingly, this application is allowed and the respondents are directed to release power supply to the petitioner as per the sanction order issued in Lr.No.SE/0/NLR/EE-T/DEE-C/F/D No.C1828/21 dated 16.08.2021 on the conditions of the petitioner depositing:
(1) the charges as mentioned in the aforesaid sanction order dated 16.08.2021 and other incidental charges (which, if he already paid can be ignored) (2) 1/10th of the electricity consumption charges due from M/s. Om Sri Sai Ferroy Alloys Private Limited to the respondents as on the date of auction sale.13
The above amounts shall be deposited by the petitioner within eight (8) weeks from the date of this order, in which case, the respondent authorities shall release power supply to the petitioner unit. Needless to emphasize that in case the petitioner succeeds in the writ petition, the electricity consumption charges of M/s. Om Sri Sai Ferroy Alloys Private Limited paid by him, can be requested to be adjusted towards petitioner‟s own consumption charges.
As a sequel, interlocutory applications pending, if any, shall stand closed.
_________________________ U.DURGA PRASAD RAO, J 21.03.2022 mva