IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No 2109-2110 of 2004
K C Ninan ... Appellant
versus
Kerala State Electricity Board & Ors. …Respondents
With
Civil Appeal No 2108 of 004
With
Civil Appeal Nos 5312-5313 of 2005
With
Civil Appeal No 5314 of 2005
With
Civil Appeal No 6587 of 2005
With
Civil Appeal No 7303 of 2005
With
Civil Appeal No 6579 of 2022
With
Civil Appeal Nos 6593-6594 of 2022
With
Civil Appeal No 3018 of 2007
With
Civil Appeal No 7169 of 2022
With
Civil Appeal No 6591 of 2022
With
Civil Appeal No 6595 of 2022
With
Civil Appeal Nos 6879-6881 of 2022
With
Civil Appeal No 6592 of 2022
With
Civil Appeal Nos 7103-7104 of 2022
With
Civil Appeal No 6828 of 2022
With
Civil Appeal No 7064 of 2022
With
Civil Appeal No 6590 of 2022
And with
Civil Appeal No 3640 of 2022
J U D G M E N T
Dr Dhananjaya Y Chandrachud, CJI
Table of Contents
A. Overview 4
B. Regulatory Regime 5
C. The position in law 10
D. Issues 14
E. Submissions 15
F. Analysis 25
G. Application: Facts of Individual Cases 89
I. Kerala 90
II. Maharashtra 99
III. Gujarat 132
IV. Assam 166
V. West Bengal 170
H. Equity and Fairness 175
I. Conclusions 177
A. Overview 1. The nineteen cases in this batch of appeals follow a similar pattern of facts. The supply of electricity was discontinued due to the failure of the previous owners to pay the dues for consumption of electricity on the premises. The previous owners had borrowed money or raised loans on the security of their premises. In some cases, the erstwhile owner went into liquidation. The premises were sold in auction sales generally on an “as is where is” basis. The new owners, who purchased the properties in auction, applied for new electricity connections for the premises to which electricity had been disconnected for failure to pay the dues. The Electric Utilities refused to provide an electricity connection unless the auction purchaser paid the dues of the previous owner. This refusal was derived from powers conferred under subordinate legislations, notifications, electricity Supply Codes or state regulations. The denial of electricity supply resulted in the institution of petitions under Article 226 before the High Court, leading to the judgments which are in appeal.
2. In Maharashtra State Electricity Board v. Super & Stainless Hi Alloy Ltd1 , this Court by an order dated 24 August 2006 referred the Civil Appeals to a Bench of three Judges for dealing with the issue of the recovery of arrears of electricity. The order of reference referred the question of whether electricity dues constitute a charge on the property so far as the transferor and the transferee of the unit are concerned.
3. The matters involving similar nature of dispute were tagged along with the above reference by an order dated 1 November 2007. The issue which is raised in these appeals is whether the arrears of unpaid electricity dues outstanding from the erstwhile owner can be claimed from the subsequent owner, who has acquired the property in proceedings initiated to enforce mortgages or to pay off the dues of creditors. B. Regulatory Regime
4. Electricity is a concurrent subject under the Constitution of India. Prior to the enactment of the Electricity Act 20032 , the Electricity Act 19103 governed the supply and use of electrical energy in India. The 1910 Act prescribed the legal framework for laying down cables and other works related to the supply of electricity. It also laid down a legal framework for supply of electrical energy and imposed certain responsibilities and obligations on persons licensed to supply electricity with a view to incentivise the growth of the electricity industry through private licensees.
5. Section 2(c) of the 1910 Act defined “consumer” as any person supplied with energy by a licensee or any other person engaged in the business of supplying energy to the public under the Act, and included any person whose premises were for the time being connected for the purposes of receiving energy. Section 21(2) empowered a licensee to make conditions to regulate their relations with persons who were or intend to become consumers. Section 22 obligated a licensee to supply electrical energy, on application, to every person within the area of supply on the same terms as those on which any other person in the same area was entitled. Section 24 empowered the licensee to disconnect the supply of electricity if any person neglected to pay any charge or sum for energy due to the licensee.
