THE HONOURABLE SMT JUSTICE P.MADHAVI DEVI
W.P.No. 30913 of 2022
ORDER:
In this writ petition, the petitioner is seeking a writ of mandamus declaring the action of the respondents in trying to disconnect the power supply to the petitioner premises, as illegal, arbitrary and unconstitutional and without jurisdiction and consequently to set aside the notice dated 20.02.2021 and to pass such other order or order.
2. Brief facts leading to the filing of the present writ petition are that the High Court of Andhra Pradesh in RCC No.6 of 1994 had passed an order dated 23.04.1996 winding up the company by name R.G.Foundry Forge Limited. Consequently, the official liquidator of High Court of Andhra Pradesh took possession of the properties and invited the sealed tenders for two lots of properties. The first lot was land of 32383 sq.meters with buildings in Survey No.42, IDA, Shapurnagar, Jeedimetla and the second lot was plant and machinery. One Mr.K.C.Venkateswarlu and others were declared as the highest bidders in the public auction for the first lot and the Hon'ble High Court by order dated 10.10.2002 confirmed the sale. 2
PMD,J W.P.No. 30913 of 2022 However, some problem arose with regard to the extent of land sold and after resolving the same, the auction purchasers agreed to sell the land to the writ petitioner and that on an application filed by the auction purchaser, the Court by order dated 16.09.2005 permitted the official liquidator to execute sale deeds in favour of the Petitioners No.1 & 2 and one Agarwal Developers on 07.02.2007. The respondents did not make any claim before the official liquidator at any point of time.
3. M/s.Agarwal Developers, who has purchased 34,037.26 sq.yards from official liquidator had sold:
(i) 7085 sq.yards under AGPA daed 12.03.2007 to M/s.Ansh Constructions;
(ii) 4513 sq.yards under registered AGPA to M/s.KDA Ispat Private Limited; and the balance of 22439.26 sq.yards was retained and was mortgaged to SBI as a security for the loan availed by it. The asset was, however, declared as NPA and the bank auctioned the land on 29.05.2019 and one M/s.Ch.Gowri Shankar Infra Build (India) Private Limited was declared as the successful bidder and the sale was confirmed and sale certificate also was issued.
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4. M/s.Ch.Gowri Shankar Infra Build (India) Private Limited in-turn, sold the land in pieces to different persons i.e., M/s.Om Roofing Industries, Ganesh Kumar Agarwal, Gampa Amarpal, M/s.Global infratech & Rakesh Agarwal and retained some portion with it.
5. The petitioner, on the other hand had constructed a godown and has leased it out to third parties, who have obtained electric service connection for 5KW under Service No.013203267 and M/s.Shyam Sundar Bansal i.e., the Petitioner No.2 was doing steel business from his premises and he has obtained electric supply connection for 20KW under Service No.013202993 and M/s.Ansh Construction was maintaining a weighbridge and they have obtained power connection of 5KW under Service No.013202891.
6. It is submitted by the learned counsel for the petitioner that the Superintendent Engineer i.e., respondent No.2 herein, issued a notice to one of the individual service connection holders stating that the H.T.Service Connection No.MCL-242 of M/s.R.G.Foundry was terminated due to non-payment of electricity dues of an amount of Rs.2,05,71,192/- including surcharge as on 13.12.2021 and that the services was 4 PMD,J W.P.No. 30913 of 2022 terminated as per clause 4.8.1 of Electricity Supply Code and Proceedings under Revenue Recovery Act was initiated. It was also informed that the service connection No.L.T.S.C. 020103905 in the name of M/s.Gowri Shankar Infra B located in Survey No.42, Shapurnagar is the link service of M/s.R.G.Foundry Forge Limited and that the Hon'ble Supreme Court in Civil Appeal No.1815 of 2020 has held that the DISCOM has right to collect the previous owners due from the purchaser and therefore, M/s.Gowri Shankar Infra has to pay Rs.2,05,71,192/- within 15 days there from, failing which its services will be disconnected as per clause 4.8.1 of Electricity Supply Code. Since the same was brought to the notice of the petitioners, the petitioners have filed the present writ petition.
7. Learned Senior counsel appearing for the petitioners submitted that the demand notice issued by the respondents vide letter dated 20.12.2021 is not sustainable on the grounds that:
(i) the demand is barred by limitation under Section 56(2) of the Electricity Act;
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(ii) the service connection No. L.T.S.C. 020103905 is not link service of H.T.S.C.No.MCL-242 of M/s.R.G.Foundry Forge Limited;
(iii) the respondents have not raised this demand before the official liquidator at any point of time during the liquidation of proceedings.
8. Learned counsel for the petitioner submitted that the transaction of purchase of land is not between any two private persons, but it is in the Court monitored sale by the official liquidator of the Hon'ble High Court after public notice. It is submitted that the respondents failed to make any claim before the official liquidator about the dues of M/s.R.G.Foundry Forge Limited and therefore, the petitioners herein were not in the knowledge of the dues of the erstwhile owners of the property. He further submitted that the official respondents that the demand raised in the year 2021 with regard to the possible dues prior to 2002, cannot be raised in the year 2021 as it is barred by limitation under Section 56(2) of the Electricity Act. Further he also argued that the respondent No.5 are no way connected to the M/s.R.G.Foundry Forge Limited and therefore, it cannot be categorized as link service provider and therefore the 6 PMD,J W.P.No. 30913 of 2022 judgment of the Hon'ble Supreme Court on which reliance has been placed for issuing the demand notice is not applicable to the facts of the case.
9. Learned Standing counsel for the respondents relied upon the averments made in the counter affidavit filed along with stay vacate petition and submitted that under clause 5.9.4.3 of the General Terms and Conditions of Supply Distribution and Retail Supply, the respondents had the power to disconnect the supply of a consumer for non-payment of any amount due to the company on any account after the period specified therein i.e., four months. It is submitted after termination of agreement with the consumer and dismantling the meters, the respondents cannot raise any bill under consumer. However, he submitted that the Hon'ble Supreme Court in the case of Telangana State Southern Power Distribution Company Limited and Another Vs. Srigdhaa Beverages1 has held that the electricity dues are statutory in character under the Electricity Act and as per the terms & conditions of supply, they cannot be waived and cannot partake the character of dues of purely contractual nature and therefore, the Electricity Department can demand the arrears 1 (2020) 6 SCC 404 7 PMD,J W.P.No. 30913 of 2022 due of the last owner, from the respondents purchaser. It is submitted that in view of the above judgment, the demand notice raised by the respondents is valid and writ petition has to be dismissed with cost.
10. Learned counsel for the petitioner, in rebuttal, submitted that the respondents have never raised any demand with regard to the dues of M/s.R.G.Foundry Forge Limited and have never raised objections before the official liquidator earlier. He also submitted that the in the case of Rajani Ginning & Pressing Factory, Adilabad, this Court in W.P.No.21179 of 2012 vide orders dated 26.09.2012 has held that unless the licensee continues to show the disputed amount under the bills raised within two years from the date when the alleged amount fell due, it cannot be recovered from its consumer and therefore such demand after two years is barred by limitation as prescribed under Section 56(2) of the Act. He also referred to the decision of this Court in W.P.No.11676 of 2007 wherein under similar circumstances, this Court has held that the bills raised after a period of two years from the due date, cannot be recovered as they are barred by limitation under the Electricity Act. He relied upon the decision of the Hon'ble High Court of 8 PMD,J W.P.No. 30913 of 2022 Andhra Pradesh at Amaravathi in W.P.Nos.27642 and 29048 of 2021, dated 20.04.2022 wherein the Court has followed the decision of the Hon'ble Supreme Court of India in the case of Ghanashyam Mishra and Sons Private Limited Vs. Edelweiss Asset Reconstruction Company Limited and Another2 wherein it was held that on the date of approval of resolution plan by the adjudicating authority, all claims which are not part of the resolution plan shall stand extinguished and no person shall be entitled to initiate or continue any proceedings in respect of the claim which is not a part of the resolution plan. The Court has thus, held that the claim of the electricity department which is not part of the resolution plan shall stand extinguished and no person will be entitled to initiate or continue in respect of the claim which is not the part of the resolution plan.
11. Learned Standing counsel submitted that the respondents have approached the official liquidator on 24.10.1997 vide Letter No.SC/OP/RRD/SAO/HT-III/D.No.644, to settle the electricity dues amount of Rs.33,46,269/- pending after termination of agreement on 06.02.1994 against the RRN242 of 2 (2021) 9 SCC 657 9 PMD,J W.P.No. 30913 of 2022 M/s.R.G.Foundry Forge Limited and also the copies of the agreement and other documents were also submitted as requested by the official liquidator of Hon'ble High Court of Andhra Pradesh. It is submitted that the company again requested the official liquidator in various letters from time to time the latest being 21.03.2022 for settlement of outstanding dues, but there was no progress and the claim in Form-66 as requested by the office of the official liquidator was also submitted vide letter dated 18.08.2022. He has drawn the attention of this Court to Form-66 filed before the official liquidator on 18.08.2022.
12. As regards the Hon'ble Supreme Court judgment on which the respondents have placed reliance upon, the learned counsel for the petitioner submitted that the issue of limitation was not before the Hon'ble Supreme Court and the Hon'ble Supreme Court, in fact, has held that in that case, there existed a clause in the sale deed that the liability of the vendor is taken over by the purchaser. It is submitted that therefore the decision of the Hon'ble Supreme Court is distinguishable on facts from the facts of the present case and therefore it cannot be applied to the case on hand.
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13. Having regard to the rival contentions and the material on record, this Court finds that the Hon'ble Supreme Court in the case of Telangana State Southern Power Distribution Company Limited and Another Vs. Srigdhaa Beverages (cited supra), has held that the electricity dues are statutory in character and therefore they cannot be waived and they can be recovered under the Revenue Recovery Act. The respondents have raised the demand after the lapse of two years as prescribed under Section 56 (2) of the Electricity Act. For the sake of ready reference, the relevant provision is reproduced here under:
Section 56: (Disconnection of supply in default of payment):
(1) **** (2) Notwithstanding anything contained in any other law for the time being in force, no sum due from any consumer, under this section shall be recoverable after the period of two years from the date when such sum became first due unless such sum has been shown continuously as recoverable as arrears of charges for electricity supplied and the licensee shall not cut off the supply of the electricity.
14. Thus, though the respondents have the authority to recover the dues of the previous owner from the existing owner or to deny fresh connection to the purchaser, it can only be done within the period of limitation prescribed under Section 11 PMD,J W.P.No. 30913 of 2022 56(2) of the Act. Admittedly, in this case, property was purchased in the public auction and the official liquidator has given public notices with regard to the liquidation process and calling for objections with regard to the same. Admittedly, the respondents have not filed any claim petition before the official liquidator within the prescribed period and therefore the liquidation process has been completed. The petitioners therefore cannot be considered as having the link service with the previous owner and raising the demand after a period of nearly more than ten years is clearly barred by limitation. This Court, in the cases relied upon by the learned counsel for the petitioners, have clearly held so. Further, the Hon'ble High Court of Andhra Pradesh at Amaravathi has also gone into the issue as to whether a claim which was not raised during the liquidation process, can be raised subsequently and following the decision of the Hon'ble Supreme Court in the case of Ghanashyam Mishra and Sons Private Limited (cited supra) it was held that such a claim is not permissible.
15. Though the learned Standing counsel claims that the respondents have made an application before the official liquidator in the year 1997 itself, no copy is furnished before the 12 PMD,J W.P.No. 30913 of 2022 Court and only the copy of the letter dated 18.08.2022 is filed along with Form-66, in which there is a reference to the letter dated 24.10.1997.
16. If the respondents had made an application before the official liquidator then the claim would have been considered by the official liquidator and the resolution plan/liquidation plan of the official liquidator has not been challenged by the respondent authorities. Therefore, they cannot now turn around and submit that their dues have to be considered after the liquidation process is completed.
17. In view of the same, this Court holds that the impugned demand notice issued by the respondents is not sustainable and it is accordingly set aside.
18. Accordingly, this writ petition is allowed. There shall be no order as to costs.
19. Miscellaneous petitions, if any, pending in this writ petition, shall stand closed.
____________________________ JUSTICE P.MADHAVI DEVI Date: 21.04.2023 bak 13 PMD,J W.P.No. 30913 of 2022 THE HONOURABLE SMT JUSTICE P.MADHAVI DEVI W.P.No. 30913 of 2022 Dated: 21.04.2023 bak