Madras High Court

K.Hariprasad vs Tamil Nadu Generation And on 22 June, 2022

                                                                              W.P.No.311 of 2022

                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                 DATED: 22.06.2022

                                                      CORAM:

                                   THE HON'BLE MR. JUSTICE ABDUL QUDDHOSE

                                                 W.P.No.311 of 2022


                     K.Hariprasad                                        ...Petitioner
                                                      vs.

                     1. Tamil Nadu Generation and
                         Distribution Company Limited
                     (TANGEDCO)
                     Represented by its Chairman
                     cum Managing Director
                     No.144, Anna Salai,
                     Chennai – 600 002.

                     2. Junior Electrical Engineer
                     Gobi Electricity Distribution Circle,
                     West – Bhavani
                     TNEB
                     Urachikottai,
                     Bhavani – 638 301,
                     Erode District.                                      ...Respondents

                     Prayer : Writ Petition filed under Article 226 of the Constitution of India,
                     to issue a Writ of Certiorari, calling for the records of the letter dated
                     27.10.2021        bearing   Letter     No.E.Mi.Po/E.Pe/Merku/       Bhavani/
                     Ko:Vi/En:327/2001 (“Impugned Letter”) issued by the 2nd respondent
                     herein and quash the same .


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                                                                                    W.P.No.311 of 2022

                                  For petitioner                    : Mr.Adarsh Subramanian
                                  For respondents                   : Mr.Abul Kalam,
                                                                      Standing counsel


                                                           ORDER

The issue involved in this writ petition is whether a person claiming

to be a bonafide purchaser can be held liable for the penalty amount

liable to be paid by his vendor for the alleged theft of electricity

committed by his vendor when he was in possession and occupation of

the property as the absolute owner.

2. The petitioner has purchased a vacant land from a person by

name N.Sidheswaran under Sale deed dated 03.05.2017 registered as

Document No.1552 of 2017, SRO, Bhavani. The total extent of the land

purchased by the petitioner is 2.62 acres comprised in R.S. No.509 of 1

in Bhavani Village, Bhavani Taluk, Erode District. The petitioner claims

that he is the Director of a Company by name M/s.Poovarasi Textile Mills

Private Limited, which is running a small scale industry and is

registered under the Micro, Small and Medium Enterprises Development

Act (MSMDE Act). The petitioner has applied for a new electricity

service connection after construction of the building in the vacant land

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W.P.No.311 of 2022

with the first respondent and sought for three phase connection with

Industrial-Service -Tariff-III-B supply with a load of 110.5 KW.

3. Under the impugned order dated 27.10.2021 issued by the

second respondent, the petitioner has been directed to pay a sum of

Rs.2,16,01,378/- for the dues payable by his vendor Sidheswaran as

according to the respondents, his vendor Sidheswaran had committed

theft of electricity while he was in possession of the subject property

prior to the sale made by him in favour of the petitioner. The petitioner

contends that he is not liable to pay the penalty amount payable by his

vendor on account of the theft of electricity committed by him. The

petitioner also claims that the imposition of penalty for the theft of

electricity has been challenged by his vendor by filing writ petitions. The

petitioner claims that he is a bonafide purchaser having paid valuable

consideration to the vendor and he is not aware of the previous

proceedings initiated by the respondents against Sidheswaran for the

alleged theft of electricity.

4. A counter affidavit has been filed by the respondents reiterating

the contents of the impugned order imposing penalty. They would submit

that the vendor of the petitioner had committed theft of electricity and he https://www.mhc.tn.gov.in/judis

W.P.No.311 of 2022

has admitted that he is liable to pay Rs.2,16,01,378/- which is the amount

mentioned in the impugned order and he has also paid a part amount of

Rs.21,00,000/- towards compounding of the offence. According to the

respondents, the petitioner was aware of the earlier proceedings and he is

not a bonafide purchaser. They have also pleaded that the sale made by

Sidheswaran in favour of the petitioner will amount to a fraudulent sale.

According to them, no proper intimation was given by Sidheswaran to the

respondents about the conveyance made to the petitioner and therefore,

he has violated Regulations 17(4) and 17(9) (a) of the Tamil Nadu

Electricity Supply Code.

5. Heard Mr.Adarsh Subramanian, learned counsel for the

petitioner and Mr.Abul Kalam, learned Standing counsel for the

respondents.

6. The learned counsel for the petitioner would rely upon a decision

of a Division Bench of this Court in the case of Assistant Engineer / O &

M vs. Sabasthi Ammal and another rendered in W.A. No.719 of 2014

on 27.01.2015 and in particular, he refers to paragraph No.18 of the said

order and would submit that it has been made clear in the said decision https://www.mhc.tn.gov.in/judis

W.P.No.311 of 2022

that the petitioner in the writ petition who is not aware of the earlier

proceedings initiated against his vendor for theft of electricity cannot be

held liable to pay the penalty amount in respect of the dues payable by

his vendor. He would also rely upon another decision of a learned Single

Judge of this Court dated 08.03.2017 passed in the case of

R.S.Thiyagarajan vs. Assistant Electrical Engineer and another in WP

(MD) No.2155 of 2017 following the aforementioned Division Bench

Judgment. In particular, he would refer to paragraph No.5 of the said

order and would submit that the Electricity Department is not entitled to

collect charges which are due by the Ex-owner or the tenants of the Ex-

owner, which are payable by them on account of theft of energy

committed by them.

7. Relying upon the aforesaid decisions, the learned counsel for the

petitioner would submit that the petitioner is not liable to pay the

impugned demand. He would also submit that at the time of the purchase

of the property by the petitioner, it was a vacant land and therefore, the

petitioner is a bonafide purchaser, who does not know about the earlier

proceedings initiated against his vendor for the alleged theft of electricity.

The petitioner also drew the attention of this Court to the sale deed, by https://www.mhc.tn.gov.in/judis

W.P.No.311 of 2022

which, the petitioner became the owner to show that the property

purchased by the petitioner was a vacant land.

8. The learned Standing counsel for the respondents would reiterate

the contents of the counter affidavit filed in this writ petition and would

submit that even though the penalty proceedings for theft of electricity

was initiated against the vendor of the petitioner, the penalty amount will

have to be paid by the petitioner as he is not a bonafide purchaser as no

intimation of the sale in favour of the petitioner was given to the

respondents before selling the property by Sidheswaran in favour of the

petitioner.

9. The learned Standing counsel for the respondents also drew the

attention of this Court Regulation 17 (4) and 17(9) (a) of the Tamil Nadu

Electricity Supply Code in support of his contention that prior notice will

have to be given to the respondents before sale of the property. According

to him, the same has not been given and therefore, the petitioner is liable

to pay the penalty amount.

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Discussion :-

10. The very same issue has been considered by the Division Bench

of this Court in Assistant Engineer / O & M vs. Sabasthi Ammal and

another referred to supra though in that decision, the penalty proceedings

were initiated for theft of energy against the previous tenant. However,

the same principle can also be applied to the facts of this case, even

though in the instant case proceedings were initiated against the vendor of

the petitioner who is the owner. In the said decision, the Hon'ble Division

Bench has held that insofar as the penalty amount is concerned with

regard to the theft of energy, the person who has committed the theft is

alone liable to pay the penalty amount and not the successors-in-title.

The relevant paragraph of the said Hon'ble Division Bench judgment is

extracted hereunder :

18.Therefore, in the present case, the fact of the matter is

that the First Respondent/writ Petitioner by means of an order

dated 31.12.2005 was allotted a shed bearing No.915, 28 th street,

B.V.Colony, Vyasarpadi, Chennai-39 and she is engaged in a small

trade of packing salt in small polythene bags and sell the same in

retail. Moreover, electricity supply is necessary for her small

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W.P.No.311 of 2022

business and as such, the impugned order dated 17.03.2011 passed

by the Appellant/First Respondent recovering the First

Respondent/writ Petitioner to pay the sum of Rs.15,53,975/-

together with interest to the Tamil Nadu Electricity Board and only

when she is willing to pay the aforesaid amount, the new service

connection in her name would be considered is not legally a tenable

one in the eye of law because of the simple reason for theft of

energy or for the benefit enjoyed by a person in regard to the theft

of electricity only that particular person can be considered to be an

accused person and against whom the Appellant/First

Respondent/TNEB can proceed in the manner known to law and in

accordance with law. But the First Respondent/writ Petitioner by

no stretch of imagination be called upon to pay a sum of

Rs.15,53,975/- with interest to the Tamil Nadu Electricity Board

and putting a precondition in regard to the above said payment by

the Appellant/Tamil Nadu Electricity Board is not correct and

legally valid one in the eye of law based on the reason that the First

Respondent/writ Petitioner had not committed theft of electricity

or energy or even benefited by the theft of electricity which was

detected on 19.04.2001 and in fact, the previous tenant

Sengalammal was alone responsible for the same in regard to her

electricity connections A/c.67-17-584. Also that, the First

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Respondent/writ Petitioner who is not at all connected with the

previous tenant of the Second respondent/Tamil Nadu Slum

Clearance Board in the considered opinion of this Court cannot be

imposed with a liability of erstwhile tenant in the absence of any

agreement between her and the Electricity supplier, more so when

the theft of energy was purportedly detected on 19.04.2001 in

A/c.67-17-584, wherein, the theft of energy detected was used by

the erstwhile tenant namely, Sengalammal.

11. The aforesaid judgment of the Hon'ble Division Bench was also

followed by a learned Single Judge of this Court in the case of

R.S.Thiyagarajan vs. Assistant Electrical Engineer and another, dated

08.03.2017 in WP (MD) No.2155 of 2017 and in that decision the facts

are identical to the facts of this case. In the decision rendered by the

learned Single Judge referred to supra, penalty proceedings were initiated

against the ex-owner of the property from whom the petitioner therein

had purchased the property and the learned Single Judge held that the

Electricity Department is not entitled to collect charges which are due by

the Ex-owner or the tenants of the Ex-owner, which are payable by them

on account of theft of energy committed by them.

12. The relevant paragraph of the decision rendered by the learned

Single Judge is extracted hereunder :-

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5. From the reading of the above judgement of the Hon'ble Division Bench, it is clear that the Electricity Department is not entitled to collect charges which are due by the Ex-owner or the tenants of the Ex-owner, which are payable by them on account of theft of energy committed by them. However the Hon'ble Division Bench relying upon Clause 17(9)(a) of the Tamilnadu Electricity Supply Code, 2004, has held that the Electricity Department is justified in collecting the lawful electricity consumption charges from the previous occupier/tenant or other charges which are ancillary/incidental towards the service connection.

13. In the instant case, even though the respondents have stated

that the petitioner is not a bonafide purchaser, there is no iota of evidence

produced to show that he is not a bonafide purchaser. There must be

some evidence to show that the petitioner is not a bonafide purchaser.

Even though the respondents have pleaded that the sale effected by

Sidheswaran in favour of the petitioner in the year 2017 will amount to

fraudulent transfer, they have not produced any evidence to substantiate

their contention.

14. In view of the law laid down by the Hon'ble Division Bench of

this Court, which has been followed by another learned Single Judge of

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