Susheel Kumar Agarwal And Another vs The Southern Power Distribution ...
2023 Latest Caselaw 1718 Tel

      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.

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.

PMD,J W.P.No. 30913 of 2022

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

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;

PMD,J W.P.No. 30913 of 2022

(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

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

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

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

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.

PMD,J W.P.No. 30913 of 2022

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

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

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

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