2008 (11) TMI 736 - SC - Indian Laws

Recovery of unpaid Electricity dues from subsequent owner - High Court was of the view that the amounts said to be due by third respondent were secured by a bank guarantee furnished by the third respondent, and therefore there was no need to retain any amount from the purchasers of the sub-divided plots. HELD THAT - In this case, when the first respondent, who was the purchaser of a sub-divided plot, wanted a new electricity connection for its premises, the appellant informed the first respondent that such connection will be provided only if the electricity dues are paid pro-rata. They were justified in making the demand. Therefore, it cannot be said that the collection of sum from first respondent was illegal or unauthorized. It is relevant to note that when the said amount was demanded and paid, there was no injunction or stay restraining the appellant from demanding or receiving the dues. Whether the supplier can recover the electricity dues from the purchaser of a sub-divided plot? - In this case, the first respondent had voluntarily paid the said amount to the appellant to obtain a fresh electricity connection. It cannot seek refund on the basis of any subsequent order of the Commission, in the absence of a specific direction for refund. The first respondent having paid the said amount in pursuance of its undertaking as a condition for obtaining fresh connection, is estopped from claiming the amount back, except in accordance with the terms subject to which the payment was made. The amount deposited by first respondent will however have to be refunded by the appellant, with appropriate interest, if the third respondent is ultimately found to be not liable in respect of the demand under the supplementary bills, or if third respondent actually clears the dues. In view of the above, we allow this appeal, set aside the order of the High Court and dismiss the writ petition of the first respondent.

Summary

Issues involved:
1. Whether the supplier can recover the electricity dues from the purchaser of a sub-divided plot?
2. Whether the appellant is liable to refund the pro rata payment made by the first respondent?

Issue 1: Whether the supplier can recover the electricity dues from the purchaser of a sub-divided plot?

The appellant contended that a transferee seeking electricity connection to a premises must clear the dues of the previous occupant as per the Electricity Supply Code. The distributor-supplier and the premises owner are parties to the contract, and a subsequent occupant without a contract cannot be asked to pay the predecessor's dues. However, the distributor can require arrears clearance before providing electricity, ensuring compliance with statutory rules or self-imposed conditions. The court upheld the distributor's right to demand dues for electricity supplied to a premises before granting a connection to safeguard against defaults and ensure recovery.

Issue 2: Whether the appellant is liable to refund the pro rata payment made by the first respondent?

The Commission directed the appellant not to demand pro rata arrears from plot purchasers if the third respondent provided a bank guarantee for outstanding dues. The first respondent voluntarily paid the pro rata dues before this order. The court ruled that the first respondent, having paid voluntarily, cannot claim a refund unless specified by the Commission. If the third respondent is found not liable or clears the dues, the appellant must refund with interest. The court allowed the appeal, overturning the High Court's order and dismissing the first respondent's writ petition.