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2012 (11) TMI 406 - SC - Indian LawsAuction sale from the Official Liquidator - respondent No.1 directed to pay the arrears of electricity dues outstanding against the premises in question - Held that - Respondent No. 1 has purchased the said unit from the Official Liquidator on as is where is and whatever there is basis in pursuance of the advertisement for sale and the sale was confirmed on payment of the sale consideration and possession of the unit was handed over on 28.03.2008. After taking possession of the Unit in order to establish a paper unit in the premises, respondent No. 1 made an application on 10.12.2008 to the NESCO for availing power of 100 KW at 33 KV. Sub-clause 10(b) of Regulation 13 of the Electricity Supply Code that unless respondent No. 1 pays the arrears of electricity dues against the erstwhile company, electricity supply cannot be restored to its Unit will not apply to respondent No. 1 as he had after purchase of the said Unit in an auction sale conducted by the Official Liquidator has applied for a fresh service connection for supply of energy. Respondent No. 1 has not applied for transfer of service connection from the name of the erstwhile company to its name. Such clause applies to a request for transfer of service connection but not to a fresh connection. The interpretation of this clause by learned single Judge as well as by the Division Bench was correct being reasonable, just and fair.
Issues Involved:
1. Liability of the auction purchaser to pay arrears of electricity dues of the previous owner. 2. Applicability of the Orissa Electricity Regulatory Commission Distribution (Conditions of Supply) Code, 2004. 3. Interpretation of Section 43 of the Electricity Act, 2003. 4. Relevant judicial precedents regarding electricity dues and auction purchases. Detailed Analysis: 1. Liability of the Auction Purchaser to Pay Arrears of Electricity Dues of the Previous Owner: The primary issue in this case is whether a company that purchased the property of another company under liquidation through auction is liable to pay the arrears of electricity dues outstanding against the erstwhile company. The Supreme Court held that the auction purchaser (respondent No. 1) is not liable to pay the arrears of electricity dues of the previous owner. The Court emphasized that the respondent No. 1 applied for a fresh connection and not for the transfer of the existing connection. The electricity dues were levied against the erstwhile company and not the premises. 2. Applicability of the Orissa Electricity Regulatory Commission Distribution (Conditions of Supply) Code, 2004: The Court examined sub-clause 10(b) of Regulation 13 of the Electricity Supply Code, which states that the transfer of service connection shall not be effected unless the arrear charges pending against the previous occupier are cleared. The Court concluded that this provision is not applicable to the respondent No. 1, as it applied for a fresh service connection and not for the transfer of an existing connection. The Court affirmed that the interpretation of this clause by the learned single Judge and the Division Bench was correct, being reasonable, just, and fair. 3. Interpretation of Section 43 of the Electricity Act, 2003: Section 43 of the Electricity Act, 2003 mandates that every distribution licensee shall, on an application by the owner or occupier of any premises, supply electricity to such premises within one month after receipt of the application. The Court reiterated that this provision casts a duty on the distribution licensee to supply electricity upon fulfilling necessary conditions such as installation of machinery and deposit of security. The Court found that the respondent No. 1 fulfilled these conditions and hence, the appellant (NESCO) was obligated to provide the electricity connection. 4. Relevant Judicial Precedents Regarding Electricity Dues and Auction Purchases: The Court referred to several precedents, including: - Isha Marbles vs. Bihar State Electricity Board (1995): The Court held that an auction purchaser cannot be called upon to clear the past arrears as a condition precedent to supply electricity. - Paschimanchal Vidyut Vitran Nigam Ltd. vs. DVS Steels & Alloys Pvt. Ltd. (2009): The Court noted that a purchaser of premises cannot be foisted with the electricity dues of any previous occupant in the absence of any contract to the contrary. - Ahmedabad Electricity Co. Ltd. vs. Gujarat Inns Pvt. Ltd. (2004): The Court held that in the case of a fresh connection, the auction-purchasers cannot be held liable for the arrears incurred by the previous owners. - Haryana State Electricity Board vs. Hanuman Rice Mills (2010): The Court summarized that electricity arrears do not constitute a charge over the property, and a transferee of premises cannot be made liable for the dues of the previous owner/occupier unless statutory rules authorize such a demand. Conclusion: The Supreme Court dismissed the appeal, holding that the respondent No. 1, who purchased the premises under court auction sale from the Official Liquidator on "as is where is" and "whatever there is" basis, is not liable to pay the arrears of electricity dues of the previous owner. The Court agreed with the decisions of the learned single Judge and the Division Bench of the High Court, affirming that the request was for a fresh connection and not a transfer of the existing connection.
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