Jharkhand High Court
Om Prakash Garg vs Jharkhand Bijli Vitran Nigam ... on 8 December, 2021
IN THE HIGH COURT OF JHARKHAND AT RANCHI
L.P.A. No. 748 of 2019
Om Prakash Garg --- --- Appellant
Versus
1. Jharkhand Bijli Vitran Nigam Limited through its Chairman, Ranchi
2. The General Manager-cum-Chief Engineer, Jharkhand Bijli Vitran Nigam
Limited, Singhbhum Area, Jamshedpur, East Singhbhum
3. The Electrical Superintending Engineer, Jharkhand Bijli Vitran Nigam
Limited, Saraikella-Kharsawan
4. Electrical Executive Engineer, Jharkhand Bijli Vitran Nigam Limited,
Saraikella- Kharsawan
5. Assistant Electrical Engineer, Electric Supply Sub-Division,
Karandih, East Singhbhum
6. Electrical Executive Engineer, Jharkhand Bijli Vitran Nigam Ltd.,
Saraikella-Kharsawan --- --- Respondents
---
CORAM: Hon'ble Mr. Justice Aparesh Kumar Singh
Hon'ble Mrs. Justice Anubha Rawat Choudhary
---
For the Appellant: M/s Navniti Prasad Singh, Sr. Advocate,
Dhananjay Kr. Pathak, Sweta Rani, Advocates
For the Respondents: Mr. Mukesh Kr. Sinha, Advocate
---
Reserved on: 03/11/2021 Pronounced on: 08/12/2021
----
Aparesh Kumar Singh, J: By the impugned judgment dated 14.08.2019 passed in WPC No.
3663/2017, the prayer for grant of fresh electricity connection to the appellant
has been refused by the learned single Judge.
2. The Appellant-Company purchased the land bearing plot no. 55/1725
under new Khata No. 158 measuring 38.35 decimals corresponding to old
portion of plot no. 6 under old Khata No. 33 at Mouza Bayangbil, Thana No.
1184, P.S. Sundarnagar, Jamshedpur District East Singhbhum vide sale deed
dated 29.03.2011 for a consideration amount of Rs. 7, 50,000/- from Sunil
Kumar Bhalotia (Annexure-1). Petitioner applied for electricity connection on
30.09.2016 along with a copy of the sale deed and affidavit (Annexure-2). The
Assistant Electrical Engineer disclosed to the petitioner that there are dues of
Rs. 8, 87,968/- against M/s Bhalotia Steel Industries being Connection No.
NHJ-52, for which a Certificate Case No. 698/1998-99 has been filed before the
Certificate Officer at Karandih, East Singhbhum. Certificate case was filed on
26.02.1999 and a formal order of issuance of notice was passed on 17.03.2012.
3. It is pertinent to mention here that the entire order sheet of Certificate
Case No. 698/1998-99 pending before Certificate Officer, Karandih, East
Singhbhum has been brought on record by way of an affidavit filed by the
Respondent in compliance of the order dated 28.09.2021. It appears from
perusal of the order dated 01.07.2013 passed by the Certificate Officer that
statutory notice under section 7 of Bihar and Orissa Public Demands Recovery
Act, 1914 was issued upon the Certificate Debtor in terms of the order dated
05.09.2012 and the matter was kept pending awaiting service report. A common
notice was thereafter published on 27.04.2013 in the local newspaper
'Uditwani' where the name of the Certificate Debtor was also included. By the
said order, it has been held that the Certificate Debtor is liable to pay the entire
certificate amount of Rs. 8, 70,968.27/- along with interest @12% p.a. from the
date of institution of the case i.e. 26.02.1999 and Certificate Debtor has been
directed to pay the said amount within a period of 15 days from the date of the
order, failing which Certificate Holder shall be at liberty to seek execution of
the Certificate in accordance with law. It is thus clear that in terms of section 8
of Bihar and Orissa Public Demands Recovery Act, 1914 charge on the
property in question was not existing on the date of the sale deed dated
29.03.2011, since in the certificate proceeding, notice had not been served on
the Certificate Debtor i.e. vendor of the Appellant-Company. The application
for fresh electrical connection was not entertained by the Respondent on the
ground of dues of Rs. 8, 87,968/- lying in the name of the previous consumer
M/s Bhalotia Steel Industries.
4. Appellant had previously approached this court in WPC No. 6323/2016
which was disposed of vide order dated 22.11.2016 with a direction to the
concerned Electrical Executive Engineer to pass necessary order. By order
dated 31.05.2017, impugned in the writ petition, concerned authority i.e.
Electrical Executive Engineer, Electric Supply Division, Jamshedpur refused to
grant fresh electricity connection on the grounds of dues of erstwhile owner
relying upon Clause 5.3.3 of Electricity Supply Code Regulations, 2015 which
was brought into effect from 07.09.2015. Learned single Judge, by the
impugned judgment, refused to entertain the writ petition on the ground that the
provisions of Electricity Supply Code Regulations, 2015 will be applicable
while considering the application of the petitioner which has been filed on
30.09.2016 i.e. after coming into force of the Electricity Supply Code
Regulations, 2015 with effect from 07.09.2015. Learned single Judge was of the
view that merely on account of purchase of the landed property on 29.03.2011,
petitioner cannot claim to get electricity connection without making an
application. The date for consideration would be the date of making an
application by a person who is seeking connection from the licensee which is
30.09.2016. Therefore, cause of action for getting electricity connection afresh
would be 30.09.2016 on which date Electricity Supply Code Regulations, 2015
had become applicable. Learned single Judge was also of the view that
Electricity Supply Code Regulations, 2015 being in the nature of Subordinate
Legislation, cannot be implemented with retrospective effect.
5. On behalf of the appellant, learned Senior Advocate Mr. Navniti Prasad
Singh has argued that at the relevant point of time when the land in question
was purchased by the appellant, Electricity Supply Code Regulations, 2005 was
in operation. In the said Regulation vide Gazette Notification dated 16.04.2007,
an amendment was made to introduce Clause 5.5. The said provision made it
clear that, if a person seeking fresh electricity connection is in arrears or in any
manner concerned or connected with the defaulting consumer, then electricity
connection shall not be granted, unless dues are paid in full. However, if the old
consumer leaves the premises for good and it comes in legal possession of new
occupant through transfer, and the new occupant is in no manner connected
with the previous owner applies for connection, in that event, it shall be
obligatory for the distribution licensee to give power supply without realization
of the arrear and the purchaser would not be held liable to pay the liability of
the previous consumer to get secure electricity connection. Learned counsel has
submitted that the aforesaid provision has remained intact under Clause 6.10 of
Electricity Supply Code Regulations 2015 issued by the Jharkhand State
Electricity Regulatory Commissioner (JSERC). It is submitted that Clause 5.3.3
of Electricity Supply Code Regulations, 2015 speaks about obtaining no dues
certificate from the concerned distribution licensee at the time of purchase of
the existing property. Learned single Judge has failed to consider that the
appellant could not be asked to do an impossible act of obtaining no dues
certificate from the previous owner before change in ownership of the property,
since sale deed has been executed on 29.03.2011 itself when Clause 5.3.3 of
Electricity Supply Code Regulations, 2015 was not in existence. Learned single
Judge has not taken note that property was purchased without any encumbrance
or charge over it. Learned single Judge has also not taken into account that
similar provision like Clause 5.5 of Electricity Supply Code Regulations, 2005
exists under Clause 6.10 of Electricity Supply Code Regulations, 2015. It is also
submitted that the affidavit which has been taken note of in the order dated
31.05.2017 refusing electricity connection to the appellant, is of 26.09.2016
while requisition for supply of electrical energy was made on 30.09.2016. It is
submitted that in terms of the conditions contained in the statutory requisition
form for supply of energy (Annexure-2), applicant / appellant had clearly stated
that he has no relationship with the previous consumer and has also denied to
clear the past liability of the previous connection in the premises. In any case,
the affidavit dated 26.09.2016 cannot be made the basis to deny electricity
connection. Respondents are under statutory obligation to provide Electricity
connection to the appellant in view of Clause 6.10 of Electricity Supply Code
Regulations, 2015 and its pari materia provisions under Clause 5.5 of Electricity
Supply Code Regulations, 2005. Learned senior counsel for the appellant has
submitted that since electricity supply is based upon a contract between the
erstwhile consumer and the Board, the Board / Respondent Company cannot
seek enforcement of contractual liability against third party. There is no charge
over the property and the licensee cannot put a condition precedent to clear the
arrears of previous occupier for securing fresh electrical connection. In this
connection, he has relied upon the decision in the case of Isha Marbles versus
Bihar State Electricity Board and another [(1995) 2 SCC 648, para-56 to
63]. It is submitted that the aforesaid proposition of law has been followed in
the case of Ahmedabad Electricity Co. Ltd. versus Gujarat Inns Pvt. Ltd.
and others [(2004) 3 SCC 587]. It has been further submitted that in the case
of Paschimanchal Vidyut Vitran Nigam Limited and others versus DVS
Steels and Alloys Private Limited and others [(2009) 1 SCC 210), it has been
held that a transferee of the premises or a subsequent occupant of a premises
with whom the supplier has no privity of contract cannot obviously be asked to
pay the dues of his predecessor-in-title or possession, as the amount payable
towards supply of electricity does not constitute a 'charge' on the premises. It is
submitted that however, in the facts of the said case, the Apex Court has held
that such legal position could not be of any practical help to a purchaser of a
premises when the purchaser of a premises approaches the distributor licensee
for a fresh electricity connection, the distributor can stipulate the terms, subject
to which it would supply electricity. It can stipulate as one of the conditions for
supply, that the arrears due in regard to the supply of electricity made to the
premises when it was in the occupation of the previous owner / occupant,
should be cleared before electricity supply is restored to the premises or a fresh
connection is provided to the premises. Taking note of the specific provisions
under Clause 4.3 (g) (h) of Electricity Supply Code applicable in the said case,
the Board i.e. Paschimanchal Vidyut Vitran Nigam Limited was held to be
justified in making the demand from the first Respondent. Learned counsel for
the appellant has submitted that proposition of law settled in the case of Isha
Marbles (Supra), has been reiterated in the case of Special Officer,
Commerce, North Eastern Electricity Supply Company of Orissa (NESCO)
and Another versus Raghunath Paper Mills Private Limited and Another
[(2012) 13 SCC 479, para 15 to 21] wherein case of Paschimanchal Vidyut
Vitran Nigam Limited and others (Supra) has also been considered. In the
said case, the Respondent Raghunath Paper Mills Private Limited had not
applied for transfer of service connection from the name of the erstwhile
Company to its name, but it had applied for a fresh connection after purchasing
the same from the Official Liquidator. Therefore, it was held that Clause 10(b)
of Regulation 13 of the Electricity Supply Code was not applicable to the
Respondent Raghunath Paper Mills Private Limited. The Apex Court also took
into consideration the judgement of three judges' Bench in the case of
Ahmedabad Electricity Co. Ltd. (Supra). It is submitted that the impugned
judgment is therefore is questionable on the finding that in terms of Clause
5.3.3 of Electricity Supply Code Regulations, 2015, appellant is not entitled to
get fresh electricity.
6. Mr. Mukesh Kumar Sinha, learned counsel for the Respondents has
supported the impugned judgement. He has heavily relied upon the provisions
of Clause 5.3.3 of Electricity Supply Code Regulations, 2015. It is the stand of
the Respondents that the case of the applicant / appellant shall be governed by
the provisions of Electricity Supply Code Regulations, 2015 in vogue as
application for a fresh connection was made on 30.09.2016 after coming into
force of Electricity Supply Code Regulations, 2015 on 07.09.2016. Mere
purchase of the property on 29.03.2011 could not create vested right in the
purchaser / appellant to seek fresh electricity connection so long he has not
obtained no dues certificate from the previous owner or not cleared the dues of
the previous owner. Learned counsel for the Respondent has, however, not been
able to dispute the contention of the appellant that Clause 6.10 of the Electricity
Supply Code Regulations, 2015 are pari materia to Clause 5.5 of the Electricity
Supply Code Regulations, 2005. He has also not been able to dispute that the
learned single Judge has failed to take note of Clause 5.5 of the Electricity
Supply Code Regulations, 2005 that if the new occupant who has come in legal
possession of the concerned premises through transfer or purchase and seeks a
fresh electricity connection and he is in no manner connected with the previous
owner who has left the premises for good, though old consumer may have
defaulted in payment of arrears of electricity dues or other dues for the
premises, the distribution licensee shall be obliged to order reconnection of
electrical line as the new incumbent would not be held liable to meet the
liability of the previous consumer. Learned counsel for the Respondent has,
however strongly relied upon the decision in the case of Paschimanchal
Vidyut Vitran Nigam Limited and others (Supra) to support his contention
that the distribution licensee can insist upon the purchaser of a new premises
seeking fresh electricity connection for fulfilment of requirement of Clause
5.3.3 of Electricity Supply Code Regulations, 2015 and pay arrears of dues in
regard to supply of electricity made to the premises when it was in possession
of the previous owner / occupant before electricity is restored to its premises /
fresh connection is provided to the premises. He submits that the learned single
Judge has rightly held that the petitioner / appellant did not have a vested right
to seek fresh electricity connection under Electricity Supply Code Regulations,
2015 merely by purchase of the property by the sale deed dated 29.03.2011 as
the date for consideration would be the date on which such application for fresh
electricity connection has been made. He submits that there is no question of
retrospective application of the Electricity Supply Code Regulations, 2015, as
held by the learned single Judge. However, application for a fresh electricity
connection having been made on 30.09.2016, has to be governed by the
provisions of Clause 5.3.3 of Electricity Supply Code Regulations, 2015. He
has submitted that otherwise, the Electricity Company would not be in position
to recover arrears of previous consumer and thus, would suffer heavy loss.
Learned counsel for the Respondents has also not been able to dispel the
contention of the appellant that no notice was served upon the Certificate
Debtor in connection with the certificate proceeding bearing case no. 698/98-99
when the property was sold to the appellant vide sale deed dated 29.03.2011. As
such, no charge over the property was created in terms of section 8 of Bihar and
Orissa Public Demands Recovery Act, 1914 on the property on the date on
which it was purchased by the appellant. Learned counsel for the Respondents
referred to the decision of the learned Division Bench of this Court rendered in
the case of M/s Sanjeev Trading Company versus Jharkhand State Urja
Vikas Nigam Limited and Others in L.P.A. No. 245 of 2014 dated
04.12.2014. Learned counsel for the Respondents has submitted that the
Coordinate Bench in the case of similar nature where electricity connection was
refused to the appellant on account of existing dues on the same premises, has
categorically held that unless dues are paid, no reconnection or new connection
will be given. Learned Court has taken note of the definition of consumer under
section 2(15) of Electricity Act, 2003 and Section 18 of Bihar and Orissa Public
Demands Recovery Act, 1914 and further Clause 1, 9 and 10 of the lease
agreement between lessor and the lessee, which made the facts of the said case
different from the facts of Ishal Marbles (Supra), relied upon by the appellant.
Learned court therefore refused to quash the letter of the Electrical Executive
Engineer refusing to grant fresh electricity connection.
7. Learned senior counsel for the appellant has distinguished the decision
of M/s Sanjeev Trading Company (Supra). He submits that the learned court
decided the said case on its peculiar facts, as is evident from para-6 of the
judgment. None of the provisions under Electricity Supply Code Regulations,
2005 such as Clause 5.5 were taken into consideration. It has been pointed out
that in the said case, premises was a cold storage, a commercial premises owned
by the lessor Bihar State Cooperative Marketing Union Limited which had
leased it out to one Chandra Shekhar Prasad Singh on certain terms and
conditions. The said lessee had not paid the electricity dues for running cold
storage which was disconnected on account of non-payment of energy charges.
The property was given on lease by the lessor to the appellant M/s Sanjeev
Trading Company. The Agreement contained several terms and conditions. As
per Clause 10 of the Agreement between lessor and lessee, the lessee was bound
to pay timely all electricity consumption or other charges and the lessee shall
not leave any amount to be paid on this account on the date of expiry of the
lease. It further stipulated that at the end of every month, the proof of payment
of electricity bill shall be produced before the lessor and the lessor shall have
option to realize the unpaid bills or other liabilities thereupon. It is submitted
that in view of specific terms contained in the lease agreement and in the
peculiar facts of the case, learned Division Bench held at para-6 that the lessee /
appellant shall not be able to take new connection or fresh connection, unless
dues are paid. It is submitted that the statutory regulations governing grant of
fresh electrical connection were neither placed nor any contention was raised in
the said decision. Relying upon the case of Quinn versus Leathem [(901 AC
495], it is submitted that a decision is only an authority for what it actually
decides. What is of the essence in a decision is its ratio and not every
observation found therein, nor what logically follows from the various
observations made in it. It is not a profitable task to extract a sentence here and
there from a judgment and to build upon it. The celebrated decision has also
been relied upon by the Supreme Court in a number of cases. He has referred to
the case of State of Orissa versus Sudhansu Sekhar Misra and Others [AIR
1968 SC 647, Para-13]. It is submitted that the decision in the case of M/s
Sanjeev Trading Company (Supra) is not only clearly distinguishable on
facts, but also does not lay down any ratio of general proposition. Lastly, he has
referred to the recent decision of the Apex Court in the case of Telangana State
Southern Power Distribution Company Limited and Another versus
Srigdhaa Beverages [(2020) 6 SCC 404] wherein the question of past liability
on auction purchaser to clear past electricity dues payable by the debtor / last
owner have been considered in the light of the earlier precedents.
8. I have considered the submissions of learned counsel for the parties in
the canvass of the facts and the provisions of Electricity Supply Code
Regulations, 2005 and Electricity Supply Code Regulations, 2015. I have also
perused the impugned judgment and also gone through the decisions rendered
by the Apex Court and this Court relied upon by the rival parties.
In order to appreciate the controversy before us in the light of the factual
canvass of the present case, it is necessary to reproduce clause 5.5 of Electricity
Supply Code Regulation, 2005.
"5.5 If the applicant, in respect of an earlier agreement executed in his
name or in the name of a firm or company with which he was associated
either as a partner, director or managing director, has any arrears of
electricity dues or other dues for the premises where the new connection is
applied for and such dues are payable to the licensee, the requisition for
supply may not be entertained by the licensee until the dues are paid in
full. But if the old consumer who had committed default in payment of the
dues has left the premises for good and the concerned premises has come
in legal possession of a new occupant through transfer or purchase of the
concerned property and where the new incumbent is not connected with
the previous owner / occupant in any manner applies for re-connection of
the electrical line in the same disconnected premises, in that event the
distribution licensee shall be obliged to order reconnection without
realization of the arrear dues of concerned premises from the new
incumbent, as the purchaser of the premises would not be held liable to
meet the liability of the previous consumer in order to secure
reconnection."
Clause 5.3.3 and 6.10 of Electricity Supply Code Regulations, 2015 is
also extracted hereunder:
"5.3.3 Purchase of existing property: Where the applicant has purchased
an existing property whose electricity connection has been disconnected, it
shall be the applicant's duty to verify that the previous owner has paid all
dues to the Distribution Licensee and obtained a "no-dues certificate"
from him. In case such "no-dues certificate" has not been obtained by the
previous owner before change in ownership of property, the new owner
may approach the Distribution Licensee for such a certificate. The
Distribution Licensee shall acknowledge receipt of such request and shall
either intimate in writing the dues outstanding on the premises, if any, or
issue a "no-dues certificate" within 1 month from date of receipt of such
application. In case the Distribution Licensee does not intimate the
outstanding dues or issue a "no-dues certificate" within this time, new
connection to the premises shall not be denied on grounds of outstanding
dues of the previous consumer. In such an event, the Distribution Licensee
shall have to recover his dues from previous consumer as per provisions of
law.
6.10 During the inspection, the Distribution Licensee shall:
(a) verify that there is no outstanding due in the applicant's name or for
the premise for which the new connection is being applied for. If the
applicant, in respect of an earlier agreement executed in his name or in the
name of a firm or company with which he was associated either as a
partner, director or managing director, has any arrears of electricity dues
or other dues for the premises where the new connection is applied for and
such dues are payable to the licensee, the requisition for supply may not be
entertained by the licensee until the dues are paid in full. But if the
erstwhile consumer defaulted payment of dues and left the premises for
good and the concerned premises has come in legal possession of a new
occupant through transfer or a decree / order of the court / authority and
who has no nexus with the previous owner / occupant in any manner,
applies for connection of the electrical line in the same disconnected
premises, the distribution licensee shall provide electrical connection
without realization of the arrear / dues of the premises payable by the
erstwhile consumer, from the subsequent transferee of the premises and he
shall not be held liable to pay / discharge the liability of the previous
consumer for securing a fresh connection ......................................."
(Emphasis supplied)
9. The appellant purchased the landed property in the District of East
Singhbhum vide sale deed no. 2556 dated 29.03.2011 measuring 38.35
decimals as described in the schedule. Relevant terms of the sale deed are also
extracted hereunder:
"1) That in pursuance of the agreement and in consideration of a sum of
Rs. 7,50,000/- (Rupees Seven Lakhs Fifty Thousand) only paid by the
purchaser to the Vendor by way of Cheque No. 008524 dated 29-03-2011
drawn on Union Bank of India, Jamshedpur, the receipt of which sum the
Vendor above-named hereby admits and acknowledges as full, final and
the highest consideration amount against the sale of the property
mentioned in the schedule below, the Vendor by these present does hereby
sell, convey, transfer, deliver and assign all that property described in the
schedule below, together with all rights, title, interest, possession,
easement, appurtenances thereto TO HAVE AND TO HOLD the same as
the lawful owner thereof without any interruption, hindrance or
disturbances from or by the present vendor and / or any other person or
persons claiming under him together with all rights, title and possession
which the vendor here-before enjoyed in respect of the schedule below
property.
2) That the Vendor has handed over the peaceful possession of the
schedule below property to the purchaser, absolutely free from all
encumbrances, liens or charges and attachments of any kind whatsoever.
6 (c) that the schedule below land or any part thereof being lost to the
purchaser, on account of any defect in the title or possession of the vendor,
then in that case all the legal heirs and successors of the vendor shall be
bound to make good the loss which the purchaser may sustain in future."
10. The recital of the sale deed indicates that the land was sold free from all
encumbrances, liens or charges and attachments of any kind whatsoever. Clause
5.5 of the Electricity Supply Code Regulations, 2005 brought into effect by
Gazette Notification dated 16.04.2007 provided that if an application is made
for a new connection by an applicant in respect of an earlier agreement
executed in his name or in the name of a firm or company with which he was
associated either as a partner, director or managing director, has any arrears of
electricity dues or other dues for the premises where the new connection is
applied for and such dues are payable to the licensee, the requisition for supply
may not be entertained by the licensee until the dues are paid in full. However,
second part of Clause 5.5 provides that if the old consumer who had committed
default in payment of the dues has left the premises for good and the concerned
premises has come in legal possession of a new occupant through transfer or
purchase of the concerned property and where the new incumbent is not
connected with the previous owner / occupant in any manner applies for re-
connection of the electrical line in the same disconnected premises, in that
event, the distribution licensee shall be obliged to order reconnection without
realization of the arrear dues of concerned premises from the new incumbent, as
the purchaser of the premises would not be held liable to meet the liability of
the previous consumer in order to secure reconnection. There exists a similar
provision under Electricity Supply Code Regulation, 2015 being Clause 6.10.
First part of Clause 6.10 similarly provides that in case there are outstanding
dues in the applicant's name or for the premises for which the new connection
is being applied for and he was associated either as a partner, director or
managing director in respect of an earlier agreement executed in his name or in
the name of a firm or company with which he was associated, the requisition for
supply may not be entertained by the licensee, until arrears of electricity dues or
other dues of the premises are paid in full. The second part of the Clause 6.10 of
the Electricity Supply Code Regulations, 2015 does provide in similar fashion
as Clause 5.5 of Electricity Supply Code Regulations, 2005 that if the erstwhile
consumer defaulted in payment of dues and left the premises for good and the
concerned premises has come in legal possession of a new occupant through
transfer or a decree / order of the court / authority and who has no nexus with
the previous owner or occupant in any manner, applies for connection of the
electrical line in the same disconnected premises, the distribution licensee shall
provide electrical connection without realization of the arrear / dues of the
premises payable by the erstwhile consumer, from the subsequent transferee of
the premises and he shall not be held liable to pay / discharge the liability of the
previous consumer for securing a fresh connection.
11. A reading of both the provisions indicates that in order to deny new
connection to the premises of the transferee, there should be a nexus of the
applicant with the previous owner / occupant. On the contrary, if the purchaser
has come in legal possession through transfer or purchase of the concerned
property and has no nexus with the previous owner / occupant or is not
connected with the previous owner / occupant in any manner, the distribution
licensee is under obligation to provide electricity connection without realization
of the arrear / dues of the premises payable by the erstwhile lessee from the new
incumbent.
12. It appears that the relevant provisions under clause 5.5 of Electricity
Supply Code Regulations, 2005 and its pari materia provisions under Clause
6.10 of Electricity Supply Code Regulations, 2015 were not brought to the
notice of the learned single Judge. The decision of the learned writ court is
based upon the provisions of Clause 5.3.3 of Electricity Supply Code
Regulations, 2015 and that the application of the petitioner / appellant would be
governed thereby since the appellant had applied for a fresh electricity
connection on 30.09.2016 after coming into force of Electricity Supply Code
Regulations, 2015 with effect from 07.09.2015. Learned single Judge was of the
view that very purchase of the property on 29.03.2011 could not create a vested
right in favour of the petitioner to seek fresh electricity connection under Clause
5.3.3 of Electricity Supply Code Regulations, 2015.
Clause 5.3.3 of Electricity Supply Code Regulations, 2015 casts a duty
upon the applicant who has purchased the existing property whose electricity
connection has been disconnected to verify that the previous owner has paid all
dues to the Distribution Licensee and obtained no dues certificate from it. In
case no dues certificate has not been obtained from the previous owner before
change of ownership of the property, the new owner may approach the
Distribution Licensee for such a certificate. Where-after, the Distribution
Licensee shall acknowledge receipt of such request and shall either intimate in
writing about the dues outstanding on the premises or issue a no dues certificate
within one month from the date of receipt of such application. In case it fails to
intimate the outstanding dues or issue no dues certificate within this time, new
connection to the premises shall not be denied on the grounds of outstanding
dues of the previous consumer. In such an event, the Distribution Licensee shall
have to recover its dues from the previous consumer as per the provisions of
law. The condition stipulated under Clause 5.3.3 casting a duty upon the
purchaser / applicant seeking fresh connection to obtain no dues certificate from
the previous owner, would amount to asking an applicant who has purchased
the property prior to coming into force of the Electricity Supply Code
Regulations, 2015 with effect from 07.09.2015 to do an impossible task, since
there was no such pari materia provision under the Electricity Supply Code
Regulations, 2005 requiring the purchaser to obtain no dues certificate from its
previous owner. Law does not compel a person to do an impossible task.
[See: Arjun Panditrao Khotkar versus Kailash Kushanrao Gorantyal and
others; (2020) 7 SCC 1, Para-47 to 51]:
"47. ......... Two Latin maxims become important at this stage. The
first is lex non cogit ad impossibilia i.e. the law does not demand
the impossible, and impotentia excusat legem i.e. when there is a
disability that makes it impossible to obey the law, the alleged
disobedience of the law is excused. This was well put by this Court
in Presidential Poll, In re as follows: (SCC pp.49-50, Paras 14-15
..............."
13. Moreover, Clause 5.3.3 deals with the 'purchase of existing property'
and conditions which a purchaser of an existing property has to satisfy before
purchasing the existing property i.e. duty to verify from the previous owner that
he has paid all dues to the Distribution Licensee and obtained no dues
certificate from it. Such a condition was not in existence under Electricity
Supply Code Regulations, 2005 prior to 07.09.2015 when Electricity Supply
Code Regulations, 2015 came into force. A purchaser of a property prior to
07.09.2015 was thus under no obligation to verify from the previous owner
about the existence of any such dues of electricity, nor was he required to obtain
no dues certificate from the previous owner to that effect.
14. Under Bihar and Orissa Public Demands Recovery Act, 1914, a charge
over a property is created only after service of notice on the certificate debtor,
as per section 8 thereof, which is quoted hereunder:
8. Effect of service of notice of certificate.- From and after the
service of notice of any certificate under Section 7 upon a
certificate-debtor -
(a) any private transfer or delivery of any of his immovable
property situated in the district or, in the case of a Revenue paying
Estate, borne on the revenue roll of the district in which the
certificate is filed or of any interest in any such property shall be
void against any claim enforceable in execution of the certificate;
and
(b) the amount due from time to time in respect of the certificate
shall be a charge upon such property, to which every other charge
created subsequently to the service of the said notice shall be
postponed.
In the present case, though certificate proceedings have been instituted
vide Certificate Case No. 698/98-99 against the previous owner M/s Bhalotia
Steel Industries in respect of Connection No. NHJ-52 for realization of dues of
Rs. 8, 87,968/- before the Certificate Officer at Karandih, Jamshedpur, but no
notice was served upon the Certificate Debtor prior to the execution of sale
deed on 29.03.2011 in favour of the present appellant. This fact has been
clarified through supplementary affidavit filed by the Respondent pursuant to
the direction of this court on 28.09.2021 enclosing the entire order sheet of the
certificate case. As such, neither under terms of the sale deed nor under the
Bihar and Orissa Public Demands Recovery Act, 1914, there was a charge in
relation to the electricity dues existing on the property sold in favour of the
appellant. As such, property was sold without any encumbrances, liens or
charges and attachments of any kind whatsoever.
15. Respondents have not demonstrated that the present appellant had any
connection or nexus with the previous owner which could disentitle him from
seeking a fresh connection or reconnection of electrical line in the same
disconnected premises, as required under Clause 5.5 of Electricity Supply Code
Regulations, 2005 or Clause 6.10 of Electricity Supply Code Regulations, 2015.
Therefore, under the statutory regulations governing the case of the applicant
seeking fresh electricity connection in respect of a property which had come in
his legal possession through transfer or purchase from the previous owner,
electricity connection could not be refused on the ground that there existed
arrears of electricity dues or other dues in connection with the said premises of
the previous owner. Therefore, the Respondent could not have denied electrical
connection to the premises to the new occupant relying upon clause 5.3.3 of
Electricity Supply Code Regulations, 2015. The applicant had also clearly
mentioned in the statutory requisition form (Annexure-2) seeking a fresh
electricity connection that it had no relationship with the previous consumer. He
also denied to undertake past liability of the previous connection in the
premises. Application in the statutory requisition form was made on
30.09.2016, whereas the affidavit executed by the appellant is dated 26.09.2016.
It is also evident that the Respondent Company had lodged a Certificate Case
against the previous consumer in 1999. The Certificate Officer by order dated
01.07.2013 has held the Certificate Debtor M/s Bhalotia Steel Industries liable
to pay the entire certificate amount along with interest from the date of
institution of the case i.e. 26.02.1999. The Respondent Company therefore has
resorted to statutory remedy available to it to recover the past dues of the
premises. On that basis also, it could not have refused to grant fresh electricity
connection to the petitioner / appellant.
16. The liability of a purchaser to pay past electricity dues payable by the
debtor / last owner have been dealt with in a series of decisions rendered by the
Apex Court starting from the case of Isha Marbles versus Bihar State
Electricity Board and another [(1995) 2 SCC 648]. In the case of Isha
Marbles (Supra), sale was in pursuance of section 29 of the State Financial
Corporations Act, 1951, but there was no clause specifically dealing with the
issue of electricity dues or such other dues. The Apex Court dealt with the legal
position in the context of section 24 of the Electricity Act, 1910 and
emphasized that under section 2(c) of Electricity Act, a 'consumer' means any
person who is supplied with energy and since liability to pay electricity dues is
fastened on the consumer at the relevant point of time, the purchaser was not
the consumer. It had also been held that in absence of consumption of
electricity, the subsequent purchaser was merely seeking reconnection without
there being any statutory dues towards the consumption charges.
In the case of Paschimanchal Vidyut Vitran Nigam Limited and
others versus DVS Steels and Alloys Private Limited and others [(2009) 1
SCC 210)], the Apex Court held that supply of electricity by a distributor to a
consumer is 'sale of goods'. The distributor and the owner / occupier of a
premises are the parties to the contract for supply of electricity. A transferee of
the premises or a subsequent occupant of a premises with whom the supplier
has no privity of contract, cannot obviously be asked to pay the dues of his
predecessor-in-title or possession, as the amount payable towards supply of
electricity dues does not constitute a 'charge' on the premises. A purchaser of a
premises cannot be foisted with the electricity dues of any previous occupant
merely because he happens to be the current owner of the premises. The
supplier can therefore neither file a suit nor initiate revenue recovery
proceedings against a purchaser of a premises for the outstanding electricity
dues of the vendor of the premises in the absence of any contract to the
contrary. The question whether the supplier can recover the electricity dues
from the purchaser of a sub-divided plot, was considered by the Apex Court in
the light of the Clause 4.3 (g) (h) of the Electricity Supply Code. For better
appreciation, Para-11 and 12 thereof are extracted under:
"11. The supply of electricity by a distributor to a consumer is
"sale of goods". The distributor as the supplier, and the
owner/occupier of a premises with whom it enters into a contract
for supply of electricity are the parties to the contract. A transferee
of the premises or a subsequent occupant of a premises with whom
the supplier has no privity of contract cannot obviously be asked to
pay the dues of his predecessor-in-title or possession, as the
amount payable towards supply of electricity does not constitute a
"charge" on the premises. A purchaser of a premises, cannot be
foisted with the electricity dues of any previous occupant, merely
because he happens to be the current owner of the premises. The
supplier can therefore neither file a suit nor initiate revenue
recovery proceedings against a purchaser of a premises for the
outstanding electricity dues of the vendor of the premises in the
absence of any contract to the contrary.
12. But the above legal position is not of any practical help to a
purchaser of a premises. When the purchaser of a premises
approaches the distributor seeking a fresh electricity connection to
its premises for supply of electricity, the distributor can stipulate
the terms subject to which it would supply electricity. It can
stipulate as one of the conditions for supply, that the arrears due in
regard to the supply of electricity made to the premises when it
was in the occupation of the previous owner / occupant, should be
cleared before the electricity supply is restored to the premises or a
fresh connection is provided to the premises. If any statutory rules
govern the conditions relating to sanction of a connection or supply
of electricity, the distributor can insist upon fulfilment of the
requirements of such rules and regulations. If the rules are silent, it
can stipulate such terms and conditions as it deems fit and proper
to regulate its transactions and dealings. So long as such rules and
regulations or the terms and conditions are not arbitrary and
unreasonable, courts will not interfere with them."
17. The aforesaid decision indicates that if any statutory rules govern the
conditions relating to sanction of a connection or supply of electricity, the
distributor can insist upon fulfilment of requirement of such rules and
regulations so long such rules and regulations or the terms and conditions are
not arbitrary and unreasonable. In the case of Haryana State Electricity
Board versus Hanuman Rice Mills, Dhanauri and Others [(2010) 9 SCC
145], the Apex Court after referring to the earlier decisions in the case of Isha
Marbles (Supra) and Paschimanchal Vidyut Vitran Nigam Limited (Supra)
summarized the position in the following manner at para-12, which reads as
under:
"12. The position therefore may be summarized thus:
(i) Electricity arrears do not constitute a charge over the property.
Therefore, in general law, a transferee of a premises cannot be
made liable for the dues of the previous owner / occupier.
(ii) Where the statutory rules or terms and conditions of supply
which are statutory in character, authorise the supplier of
electricity to demand from the purchaser of a property claiming
reconnection or fresh connection of electricity, the arrears due by
the previous owner / occupier in regard to supply of electricity to
such premises, the supplier can recover the arrears from a
purchaser."
18. In the case of Special Officer, Commerce, North Eastern Electricity
Supply Company of Orissa (NESCO) (Supra), the Apex Court once again
examined the precedents referred to above and a distinction was made between
a connection sought to be obtained for the first time and a reconnection. In that
case, no application had been made for transfer of service connection from the
previous owner to the auction purchaser, but in fact, a fresh connection was
requested. In the light of the regulations therein, previous dues had to be cleared
only in the case of reconnection. Hence, Respondents were held to be free from
electricity liability. Same line of reasoning was followed in the case of
Southern Power Distribution Co. Of Telangana Ltd. versus Gopal Agarwal
[(2018) 12 SCC 644]. These authorities have been considered by the Apex
Court in the recent decision rendered in the case of Telangana State Southern
Power Distribution Company Limited and Another versus Srigdhaa
Beverages [(2020) 6 SCC 404]. The Apex Court found that the auction
purchaser / Respondent had purchased the property on "as is where is, whatever
there is and without recourse basis" and Respondent would have inspected the
premises and made inquiry about dues in all respects. Clause 5.9.6 and 8.4 of
General Terms and Conditions of supply of Distribution and Retail Supply
Licences in AP were referred to as also the provisions of Electricity Act, 2003
which provides statutory character to the electricity dues. The Apex Court in the
light of the relevant clause under General Terms and Conditions of Supply and
the provisions of Electricity Act, 2003 held that in case of e-auction notice in
question, the existence of electricity dues, whether quantified or not, has been
specifically mentioned as a liability of the purchaser and the sale is on "as is
where is, whatever there is and without recourse basis". Therefore, there cannot
be any doubt that the liability to pay electricity duty exists on the respondent. It
was held that the debate over connection or reconnection would not exist in
cases like the present one where both aspects were covered as per Clause 8.4 of
the General Terms and Conditions of Supply which stipulate that seller of the
property should clear all the dues to the Company before selling such property.
If the seller did not clear the dues as mentioned above, the company may refuse
to supply electricity to the premises through already existing connection or
refuse to give a new connection to the premises till all dues to the company are
cleared.
19. I also proceed to deal with the contention advanced by the learned
counsel for the Respondents relying upon the decision rendered by this court in
the case of M/s Sanjeev Trading Company versus Jharkhand State Urja
Vikas Nigam Limited and Others in L.P.A. No. 245 of 2014. The aforesaid
decision is clearly distinguishable on facts and in law as well. A perusal of the
said decision shows that as per Clause 10 of the Agreement between lessor and
lessee, the lessee was bound to pay timely all electricity consumption or other
charges and in case he fails to do so and submit a proof of payment of
electricity bill before the lessor, the lessor had option to realize the unpaid bills
or other liabilities thereupon. Evidently, the lease agreement between the lessor
Bihar State Cooperative Marketing Union Limited and the lessee / appellant
stipulated payment of electricity dues by the lessee. In the present case, the
Respondent Company had already initiated a proceeding against the previous
consumer for realization of electricity dues through certificate proceeding
which stands determined. It further appears that the relevant provisions under
Clause 5.5 of Electricity Supply Code Regulations, 2005 were not placed before
the learned court for consideration. As such, the said decision does not come to
the aid of the Respondent, more so in the light of the legal position settled by
the line of decisions rendered by the Apex Court, as referred to hereinabove.
The position in law, as rendered by the various decisions of the Apex Court, is
to the effect that in general law, transferee of a premises cannot be made liable
for dues of the previous owner / occupier. However, where the statutory rules or
terms and conditions of supply which are statutory in character, authorise the
supplier of electricity to demand from the purchaser of a property claiming
reconnection or fresh connection of electricity the arrears due of the previous
owner / occupier in regard to supply of electricity to such premises, the supplier
can recover the arrears from the purchaser.
20. In the present case, the property in question was purchased without
encumbrances, liens or charge and attachments of any kind whatsoever.
Electricity arrears do not constitute a charge over the property so long notice in
certificate proceedings are not served upon the Certificate Debtor in terms of
section 8 of Bihar and Orissa Public Demands Recovery Act, 1914. At the time
of sale of the property to the appellant on 29.03.2011, no such notice in the
certificate proceedings were served upon the vendor / Certificate Debtor. Under
Clause 5.5 of Electricity Supply Code Regulations, 2005 being statutory in
character, electricity could not be denied to the new occupant or purchaser of a
premises coming in legal possession through transfer or purchase of a property
even if there were arrears of electricity dues of the previous owner and if there
was no connection of the incumbent with the previous owner / occupant or any
nexus with the previous owner / occupant in any manner. The appellant /
purchaser was under no obligation to obtain no dues certificate from the
previous owner or verify whether he had paid all dues to the Distribution
Licensee before change in ownership of the property as Clause 5.3.3 of
Electricity Supply Code Regulations, 2015 was not in existence at the time of
purchase. Electricity Supply Code Regulations, 2015 was brought into force
with effect from 07.09.2015.
21. It has been rightly held by the learned single Judge that Clause 5.3.3 did
not have retrospective effect. As such, the purchaser of a property prior to
coming into force of Electricity Supply Code Regulations, 2015 (with effect
from 07.09.2015) could not be denied fresh electricity connection on the ground
that he had not been able to obtain no dues certificate from the previous owner
before change in ownership of the property. However, fresh connection could
be denied if such a purchaser had any nexus with the previous owner / occupant
in any manner or he was associated either as a partner, director or managing
director in respect of earlier agreement executed in his name or in the name of a
Firm or a Company. Considered thus, refusal of electricity connection to the
appellant relying upon Clause 5.3.3 of Electricity Supply Code Regulations,
2015 is unsustainable in law and on facts.
22. Accordingly, the impugned judgment dated 14.08.2019 declining to
interfere in the order dated 31.05.2017 (Annexure-4) refusing fresh electricity
connection in favour of the petitioner / appellant is set aside. Consequently, the
order dated 31.05.2017 (Annexure-4), impugned in the writ petition, refusing
fresh electricity connection in favour of the petitioner stands quashed. Matter is
remitted to the Respondent Company to take a fresh decision in accordance
with law within a period of four weeks from the date of receipt of a copy of this
order. Appeal stands allowed.
(Aparesh Kumar Singh, J)
I agree
(Anubha Rawat Choudhary, J)
(Anubha Rawat Choudhary, J)
Jharkhand High Court, Ranchi
Dated 8th December, 2021
Ranjeet/
