M/S Vanshika Buildtech Ltd vs New Delhi Municipal Council & Anr
2016 Latest Caselaw 6276 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                    Date of decision: 29th September, 2016.

+                                  W.P.(C) 434/2013

       M/S VANSHIKA BUILDTECH LTD                   ..... Petitioner
                    Through: Mr. Ajay Jain with Mr. S. Bhardwaj &
                             Mr. R.P. Kaushal, Advs.

                                       Versus

    NEW DELHI MUNICIPAL COUNCIL & ANR ..... Respondents

Through: Mr. Malvika Trivedi & Mr. Jitendra Kumar Tripathi, Advs.

CORAM:

HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1. The petition impugns the demand of the respondent New Delhi

Municipal Council (NDMC) (respondent no.2 is the Chief Engineer (Elect.)

of NDMC) of Rs.3,86,967/- towards arrears of electricity charges owed by

the earlier consumer / owner of Flat No.4 (2nd Floor), Building No.3, Scindia

House, Connaught Place, New Delhi.

2. It is the case of the petitioner:

(i) that the petitioner acquired Flat No.4 (2nd Floor), Building No.3,

Scindia House, Connaught Place, New Delhi in a public auction held

by the Recovery Officer of the Debts Recovery Tribunal-I, Delhi and a

Sale Certificate with respect thereto was issued in favour of the

petitioner;

(ii) that the respondent NDMC issued a challan dated 3rd

September, 2002 and a notice dated 4th September, 2002 requiring the

petitioner to clear the electricity dues of Rs.11,82,428/- of earlier

registered consumer of electricity at the said flat;

(iii) that the petitioner challenged the said demand by way of

W.P.(C) No.6058/2002 and vide interim order wherein, subject to the

petitioner depositing Rs.8 lakhs, electricity connection at the said flat

was ordered to be granted to the petitioner;

(iv) that however the writ petition aforesaid was ultimately

dismissed vide judgment dated 20th October, 2010;

(v) that the petitioner preferred LPA No.13/2011 against the

judgment aforesaid but which appeal was dismissed on 5th January,

2012;

(vi) that the petitioner accordingly deposited the balance amount of

Rs.3,82,428/- with the respondent NDMC and continued to enjoy the

electricity connection in the aforesaid flat;

(vii) that the respondent NDMC in July, 2012 for the first time raised

the impugned demand of Rs.3,86,967/- alleging the same also to be

due of electricity connection earlier issued in the name of M/s Surya

Agroils Ltd. at the address of the said flat;

(viii) that the petitioner represented thereagainst;

(ix) that though the respondent NDMC did not respond to the

aforesaid representation but stopped accepting the amounts of the

current bills tendered by the petitioner, for the reason of the petitioner

having not paid the aforesaid arrears of Rs.3,86,967/-.

3. It is the contention of the petitioner (a) that pursuant to the purchase in

the year 2002 of the aforesaid flat by the petitioner, the respondent NDMC

had made a demand of Rs.11,82,428/- only towards arrears of electricity

charges and could not after ten years, in the year 2012, claim the sum of

Rs.3,86,967/- to be also due towards arrears of electricity charges for the

period prior to 2002; (b) that the demand for Rs.3,86,967/- is time barred; (c)

that the demand of Rs.3,86,967/- is arbitrary, unreasonable, onerous and

taking advantage of the monopolistic position enjoyed by the respondent

NDMC as provider of electricity; (d) that the petitioner being the auction

purchaser of the flat cannot be saddled with outstanding electricity dues of

erstwhile owners of the said flat; (e) that the respondent NDMC, after

claiming and receiving Rs.11,82,428/- from the petitioner towards arrears, is

estopped from demanding Rs.3,86,967/- on the same account.

4. Notice of the petition was issued and vide order dated 28th January,

2013 the impugned demand stayed. The said order was made absolute on

20th January, 2014.

5. The respondent NDMC in its counter affidavit has stated (I) that the

petitioner as owner of the flat cannot escape the liability for legitimate

electricity dues of the said flat; (II) that the dues of Rs.3,86,967/- had

inadvertently escaped attention of the respondent NDMC while claiming the

dues of Rs.11,82,428/- and immediately after this fact came to notice, the

demand therefor was made; (III) that though the demand has been made after

a lapse of sometime but as per the judgment in the earlier writ petition filed

by the petitioner, cannot be said to be barred; (IV) that the earlier demand

being of Rs.11,82,428/- and the subject demand of Rs.3,86,967/- are against

electricity connections though installed at the same address but in different

names and for which reason the demand for Rs.3,86,967/- remained to be

made while making the demand for Rs.11,82,428/-; (V) that the petitioner as

owner of the flat has inherited the liability for electricity dues of the flat;

(VI) that the respondent NDMC is entitled to recover the amount which is

legally due; (VII) that the law of estoppel cannot be applied because the

demand of Rs.3,86,967/- made in 2012 was not part of the claim of

Rs.11,82,428/- made in the year 2002.

6. The petitioner declined the opportunity to file rejoinder to the counter

affidavit aforesaid. The counsels were heard on 14th March, 2016. It was the

contention of the counsel for the petitioner that the respondent NDMC

cannot make successive demands towards old electricity dues and the

impugned demand was time barred. Section 363 of the New Delhi

Municipal Act, 1994 which empowers the NDMC to recover its dues as

arrears of land revenue was noticed on that date and it was further noticed

that the Proviso thereto limits the period therefor to expiry of three years

from the date on which the same became due. It was accordingly enquired

from the counsel as to when the electricity charges subject matter of demand

for Rs.3,86,967/- became due to the respondent NDMC. It was the

contention of the counsel for the respondent NDMC on that date that the said

demand was made for the first time in 2012 and thus it could not be said that

the same was barred by the Proviso to Section 363 of the Act. Opportunity

was given to the counsels on that date to show any rules, bye-laws or

regulations as to when the amount due towards electricity becomes due.

None was shown by either of the counsels and hearing was concluded on 9th

May, 2016 and judgment reserved.

7. The counsel for the petitioner relied on (A) P.V. Raghunandan Vs.

The Registrar General 2008 (149) DLT 529 to contend that cause of action

to the respondents NDMC for recovery of the electricity dues accrued when

electricity was consumed; and; (B) Haryana State Electricity Board Vs.

Hanuman Rice Mills (2010) 9 SCC 145 where, observing that the Haryana

State Electricity Board did not demand the alleged arrears when Hanuman

Rice Mills first approached for electricity connection in its own name for the

same premises and three years thereafter made the demand for the first time

alleging that there were electricity dues of the previous owner, it was held

that the claim relating to previous owner could not be enforced against

Hanuman Rice Mills.

8. Per contra, the counsel for the respondent NDMC relied on (I) H.D.

Shourie Vs. Municipal Corporation of Delhi AIR 1987 Delhi 219 wherein

relying on Section 24 of the Electricity Act and Section 283 of the Delhi

Municipal Corporation Act, it was held that the charges for electricity would

become due and payable only with the submission of the bill and not earlier

and not the moment the electricity is consumed; (II) judgment dated 16 th

July, 2009 of the Division Bench of this Court in LPA No.211/2009 titled

N.D.M.C. Vs. Karam Chand Thapar & Brothers P. Ltd. where relying on

H.D. Shourie supra it was held that the Proviso to Section 455 of the Delhi

Municipal Corporation Act (equivalent to Section 363 supra of the NDMC

Act) will apply only when the bill has been sent and the remedy available for

filing a suit to recover the said amount could come to an end after three years

elapsed and that the provisions of Section 455 would come into play after the

submission of bill for electricity charges and not earlier and the contention

that no bill could have been raised after a period of three years was

negatived; and, (III) judgment dated 24th April, 2009 of the Division Bench

of this Court in LPA No.356/2007 titled North Delhi Power Ltd. Vs. Delhi

Bottling Co. Ltd. laying down that the electricity undertaking is at liberty to

issue the bill for consumption of electricity even after three years after the

electricity has been consumed.

9. I had however during the hearing enquired from the counsel for the

respondent NDMC, whether not NDMC in the ordinary course, at the

contemporaneous time also would have raised the bill for Rs.3,86,967/- on

the consumer thereof and how can it be said that the demand raised on the

petitioner in the year 2012 had been raised for the first time, for three years

to be counted therefrom.

10. In my opinion, the law as expounded in H.D. Shourie supra and

followed in other judgments cited by the counsel for the respondent NDMC

cannot be understood as entitling the respondent NDMC to issue repeated

demands with the period of three years mentioned in proviso to Section 363

supra being computed from last of such demands. The respondent NDMC

has shied from pleading that no demand for the said sum of Rs.3,86,967/-

was made at any time prior to the year 2012. In fact, the respondent NDMC

has not even pleaded, the period of time to which this demand pertains,

whether any subsequent bills were raised with respect to the electricity

connection to which the demand for Rs.3,86,967/- pertains and when the said

electricity connection was disconnected. Without the respondent NDMC

pleading the same, this Court cannot presume the demand made in the year

2012 to be the first demand, to be said to be within limitation in accordance

with law aforesaid.

11. It cannot be lost sight of that the equities are against the respondent

NDMC. Ordinarily the respondent NDMC ought to have acted with

promptitude and recovered its dues towards electricity contemporaneously

from the consumer thereof and not allowed the same to accumulate. I have in

Rakesh Kumar Sharma & Sons Vs. BSES Rajdhani Power Ltd. 180 (2011)

DLT 455 given findings in this regard though owing to subsequent

developments therein it was ordered that the same is not to constitute a

precedent. It cannot also be lost sight of that the petitioner is a subsequent

purchaser in an auction, of the premises to which the said demand pertains

and is not the consumer of the electricity to which the demand pertains. The

petitioner is however liable for the past electricity dues of the premises in

accordance with law laid down by the Supreme Court and as discussed by

me in Kundan Infrastructures Vs. NDMC (2010) 174 DLT 1 that entities

such as the NDMC are entitled to recover such dues as a condition for grant

of electricity connection. In discharge of the said liability, the petitioner has

already paid Rs.11,82,428/- then demanded by the respondent NDMC from

the petitioner at the time of the petitioner seeking an electricity connection.

The respondents NDMC, save for inadvertence, has not given any reason as

to why at that time the demand for Rs.3,86,967/- also was not made.

12. The aforesaid facts of this case are more akin to the facts of Haryana

State Electricity Board supra and in which facts the electricity provider was

not held entitled to recover such dues. The same result has to follow here.

13. The petition is accordingly allowed; the demand of the respondent

NDMC of Rs.3,86,967/- towards old electricity dues with respect to Flat

No.4 (2nd Floor), Building No.3, Scindia House, Connaught Place, New

Delhi is quashed and the respondent NDMC is restrained from disconnecting

or taking any other action with respect to the electricity supply to the said

flat of the petitioner, for the reason of non-payment of the said demand.

No costs.

RAJIV SAHAI ENDLAW, J.

SEPTEMBER 29, 2016 'bs'..