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TMI Blog2023 (5) TMI 1251X X X X Extracts X X X X X X X X Extracts X X X X ..... . Under Section 43, when electricity is supplied, the owner or occupier becomes a consumer only with respect to those particular premises for which electricity is sought and provided by the Electric Utilities; c. For an application to be considered as a 'reconnection', the applicant has to seek supply of electricity with respect to the same premises for which electricity was already provided. Even if the consumer is the same, but the premises are different, it will be considered as a fresh connection and not a reconnection; d. A condition of supply enacted Under Section 49 of the 1948 Act requiring the new owner of the premises to clear the electricity arrears of the previous owner as a precondition to availing electricity supply will have a statutory character; e. The scope of the regulatory powers of the State Commission Under Section 50 of the 2003 Act is wide enough to stipulate conditions for recovery of electricity arrears of previous owners from new or subsequent owners; f. The Electricity Supply Code providing for recoupment of electricity dues of a previous consumer from a new owner have a reasonable nexus with the objects of the 2003 Act; g. The Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Bansuri Swaraj, Siddhesh Kotwal, Ana Upadhyay, Manya Hasija, Nihar Dharmadhikari, Md. Sontu Mia, Advs., Nirnimesh Dube, Ram Lal Roy, Sharmila Upadhyay, AORs, Ap J Chambers, Abhijeet Sinha, Jatin Zaveri, Romy Chacko, AORs, Prashant Kumar, Robin V.S., Advs., P.N. Gupta, P.V. Dinesh, AORs, Raghenth Basant, Nida K., Akhil K.M., Advs., P.V. Yogeswaran, AOR, Amar Dave, Adv., P.S. Sudheer, AOR, Rishi Maheshwari, Anne Mathew, Bharat Sood, Advs., Sneha Kalita, AOR, Ravindra Kumar, Sr. Adv. and Divya Roy, AOR JUDGMENT Dr. D.Y. Chandrachud, C.J.I. Table of Contents A. Overview B. Regulatory Regime C. The position in law D. Issues E. Submissions F. Analysis G. Application: Facts of Individual Cases I. Kerala II. Maharashtra III. Gujarat IV. Assam V. West Bengal H. Equity and Fairness I. Conclusions 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 premi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 6. The 1910 Act was found inadequate for a coordinated development of electricity and a grid-system in India. Therefore, the Electricity (Supply) Act 1948 1948 Act was enacted for the rationalisation of the production and supply of electricity and for taking measures conducive to the development of electricity. The 1948 Act mandated the state governments to constitute State Electricity Boards Under Section 5 and entrusted them with the responsibility of administering the grid-system and arrangin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission has been empowered Under Section 50 to specify an Electricity Supply Code to provide among other things for the recovery of electricity charges, intervals for billing of electricity charges and disconnection of supply of electricity for non-payment. Under Section 56, the generating company or distribution licensee, as the case may be, may disconnect electricity supply of any person who neglects to pay any charge or sum for electricity. Section 181(2)(x) provides that the State Commission may make Regulations inter alia providing for, the Electricity Supply Code Under Section 50. 10. In light of the provisions contained in the 1910 Act, 1948 Act, and 2003 Act, various Electric Utilities such as State Electricity Regulatory Commissions, State Electricity Boards, and distribution licensees notified Conditions of Supply requiring the new owner of premises to clear the outstanding dues of the previous owner. The nineteen cases in the batch of appeals originate from the States of Kerala, Maharashtra, Gujarat, Assam, and West Bengal. 11. In Kerala, the Kerala State Electricity Board KSEB notified the Conditions of Supply of Electrical Energy in 1990. Condition 15(e) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utstanding electricity dues are duly paid up and discharged. 15. In West Bengal, the West Bengal Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2012 WB Electricity Supply Code have been notified under the 2003 Act. Clause 3.4.2 of the said Regulations empowers the licensee to recover the dues of a previous consumer in respect of the premises from a new consumer only if there is a nexus between the previous consumer and the new consumer. 16. The subsequent owners or occupiers of the premises challenged the Conditions of Supply and Electricity Supply Codes enacted by the Electric Utilities before the respective High Courts when they were called upon to clear the arrears of the previous owners or dues relating to the premises. C. The position in law 17. Prior to the enactment of the 2003 Act, in Isha Marbles v. Bihar State Electricity Board 1995 SCC (2) 648, a three-judge Bench of this Court held that in the absence of a charge being created over the premises by a statutory Regulation, an auction purchaser cannot be asked to clear the past arrears of electricity dues as a condition precedent to the grant of electricity. This Court elucidat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey desired a service connection. It was held that Isha Marbles (supra) cannot be applied to strike down Clause 21A as the Court in that case had no occasion to consider the effect of a similar clause. The matter was remitted back to the High Court for a fresh decision since it had not adjudicated on the implication of Clause 21A of the Conditions of Supply. 21. In Paschimanchal Vidyut Vitran Nigam Limited v. DVS Steels and Alloys Private Limited (2009) 1 SCC 210, this Court observed that a licensee or an electricity distributor can insist upon fulfilment of statutory rules, Regulations or the conditions of supply so long as they are not arbitrary and unreasonable. It was further held that the conditions of supply mandating the clearance of electricity dues of a previous owner by a new purchaser before electricity supply is restored or a new connection is given to the premises cannot be termed as unreasonable or arbitrary. 22. The position of law as formulated in Paramount Polymers (supra) and Paschimanchal Vidyut Vitaran Nigam Limited (supra) has been consistently followed by this Court in ensuing decisions. Recently, in Telangana State Southern Power Distribution Co. Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such arrears; and g. What is the implication of an auction-sale of premises on as is where is basis, with or without reference to electricity arrears of the premises? E. Submissions 24. To put the above-mentioned issues in their proper context, we refer to the broad legal submission adduced before us by the parties. I. Electric Utilities 25. Sarvashri M.G. Ramachandran, Mr. Ranjit Kumar, Mr. Vijay Hansaria, Mr. Ajit Bhasme, learned Senior Counsel appearing for Electric Utilities have made the following submissions: a. USO is not absolute i. (i) The duty of the licensee to supply electricity Under Section 43 of the 2003 Act is not absolute. Section 43 provides that an applicant has to fulfil the corresponding obligations to become entitled to the supply of electricity; ii. (ii) Section 43(1) opens with the words save as otherwise provided in the Act , which brings in compliance with other provisions of the 2003 Act including Section 50 which empowers the State Commission to specify the Electricity Supply Code; iii. (iii) The Explanation to Section 43(1) requires the applicant to submit an application complete in all respects along with documents s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing a detailed procedure. Therefore, the Electricity Supply Code framed by the State Commission is a subordinate legislation and has a statutory character. This statutory authority enables the Supply Code to provide for recovery of dues of the previous owner from the subsequent owner; and iii. The condition of payment of outstanding dues is not a compulsory extraction of money and does not require a primary legislation by Parliament or state legislature. Such a condition can be prescribed by a subordinate legislation. d. Electricity arrears as charge over the premises i. i. It is not the case of the Electric Utilities that there is any mortgage or charge over the property in the form that the licensee is a secured creditor. The licensee has the right to insist on clearance of outstanding dues of the premises before giving a new connection. e. Civil and Statutory remedies to recover electricity arrears of the Utilities (i) Section 56(2) of the 2003 Act does not bar the recovery of electricity arrears through other avenues of recovery in accordance with law; (ii) The limitation of two years Under Section 56(2) of the 2003 Act is with reference to bar on disconnect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er compliances contemplated Under Section 43 relates to the application fees, and cannot be stretched to include a power to require the payment of third-party arrears; (v) The statutory duty of a licensee to supply power on an application by the owner or occupier of any premises within one month is contained in Section 43(1) of the 2003 Act. The only exception to this statutory obligation is provided by Section 44 where the licensee is prevented from giving supply due to cyclone, floods, storms or other circumstances beyond his control; and (vi) The legislature has consciously inserted all the substantive requirements which the person making an application for supply of electricity is required to meet, which has been primarily captured Under Sections 43(2), 45, 46, 47, and 48 of the 2003 Act. Therefore, no power has been endowed upon the State Commission to impose any other substantive condition in the form of providing a precondition of clearance of a previous owners' dues on a subsequent owner who seeks a fresh connection. Any such condition would be in conflict with Section 43. b. Supply of electricity is with respect to consumer (i) The reference to premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricity Board to recover the electricity dues of the previous owner or occupier of the premises from the new owner or occupier of premises in question; c. The scheme of the 2003 Act, from Sections 43 to 49, makes it evident that no specific power has been conferred upon the State Commission Under Section 50 read with Section 181 of the 2003 Act or with the State Under Section 180 of the 2003 Act to add further substantive conditions like clearance of past dues of another consumer; and d. It is a settled principle of law that for framing any Rule or Regulation, a specific source of power must be provided in the parent legislation. e. Electricity arrears do not constitute a charge over the premises a. Electricity dues do not constitute a charge over property as they do not run with the land. Only a fiscal levy by way of statutory exaction could be fastened on land or any other immovable property. The State Commission Under Section 50 of the 2003 Act can only frame Regulations for supply of electricity and has no power to provide for any fiscal exaction. Only a state legislation can provide for a charge on a property by providing for levy of a duty on consumption or sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay the 'price' as determined by the State Commission to become entitled to receive supply of electricity. The 'price', it is urged, includes application fees as well as arrears of unpaid electricity dues of the previous owner or occupier. The Electric Utilities argue that in case there are outstanding dues of the previous owner they are entitled to refuse a new connection or decline to commence the supply of electricity until the dues owed by the previous owner are cleared. On the contrary, the auction purchasers have urged that Section 43 obligates the distribution licensees to supply electricity when demanded by the auction purchaser. It is further urged that the 'price' in Section 43 can only mean the price at which electricity is supplied to the distribution licensee, and cannot include the arrears of the previous owner or occupier of the premises. 28. To contextualise the submissions of counsel, it is appropriate to refer to the relevant provisions of the 1910 and 2003 enactments. Under Section 3 of the 1910 Act, the State Government could grant a licence to any person to supply energy in any specified area. By virtue of Section 3(2)(f), the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appropriate Commission. (emphasis supplied) 31. According to Section 43, the distribution licensee is obligated to supply electricity to the premises of an owner or occupier within a month of the receipt of an application requiring such supply. The provision casts a duty on the distribution licensee to supply electricity to the owner or occupier's premises. Correspondingly, the owner or occupier of the premises has a right to apply for and obtain electric supply from the distribution licensee. Chandu Khamaru v. Nayan Malik, (2011) 12 SCC 314 Both the right and the corresponding duty are imposed by the statute. The owner or occupier of the premises has to submit an application to avail of the supply of electricity. 32. In Brihanmumbai Electric Supply Transport Undertaking v. Maharashtra Electricity Regulatory Commission (2015) 2 SCC 438, a two-judge Bench of this Court observed that the obligation of the distribution licensee to supply electricity to premises will begin after the owner or occupier of such premises submits a completed application. The explanation to Section 43 clarifies that the application must be complete in all respects along with the necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly electricity Under Section 43 if the applicant fails to furnish the requisite security. Under Section 48, a distribution licensee may require the applicant, who requires a supply of electricity in pursuance of Section 43, to accept (i) any restrictions which may be imposed for the purpose of enabling the distribution licensee to comply with the Regulations made Under Section 53; and (ii) any terms restricting any liability of the distribution licensee for economic loss resulting from negligence of the person to whom electricity is supplied. Thus, it is implicit that the distribution licensee may refuse electricity supply to the applicant until they accept such terms and restrictions reasonably imposed by the distribution licensee incidental to the statute. 35. Further, Section 50 empowers the State Commission to specify an Electricity Supply Code providing for recovery of electricity charges, among other things. The Electric Utilities have urged that the duty to supply electricity is subject to the Electricity Supply Code specified Under Section 50. As mentioned in the preceding paragraphs, an applicant is required to submit a completed application along with documents showing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n defined in the Act. Tariff is a cartel of commerce and normally it is a book of rates. It will mean a Schedule of standard prices or charges provided to the category or categories of customers specified in the tariff. 40. The proviso to Section 43(2) further refers to the price payable by an applicant to demand or to continue to receive the supply of electricity from a distribution licensee. The price is to be determined by the appropriate commission. This price is the consideration, as determined by the State Commission, that an applicant pays for receiving a supply of electricity. 41. The term price has to be given a broad meaning to include all the 'tariffs' and 'charges' that may be determined by the appropriate commission. This includes the 'charges' fixed Under Section 45 by the appropriate commission from time to time and the 'charges' that a distribution licensee may impose Under Section 46 to recover any reasonable expenditure. The ambit of the term 'price' is wide enough to also include the statutory dues that the State Commission decides to enact by way of Regulations Under Section 50. 42. Thus, the duty to sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purpose of receiving electricity with the works of a licensee, the Government or such other person, as the case may be; (emphasis supplied) 46. The definition of consumer Under Section 2(15) of the 2003 Act is similar to the definition of consumer in the 1910 Act. The definition consists of two limbs: (i) any person who is supplied with electricity for their own use; and (ii) any person whose premises are for the time being connected for the purposes of receiving electricity, irrespective of whether or not such person is supplied with electricity for his own use. Uttar Pradesh Power Corporation Limited v. Anis Ahmad, (2013) 8 SCC 491 The first limb of the definition is prefaced with means while the second limb is prefaced with includes . The definition is thus exhaustive of the ambit of the expression defined. The inclusive part is intended to expand the ambit of the initial limb of the definition. 47. In Jivendra Nath Kaul v. Collector/District Magistrate (1992) 3 SCC 576, a two judge Bench of this Court held that the meaning of the phrase for the time being means at the moment or the existing position. The reference to premises in the second lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to operate and maintain a distribution system for supplying electricity to the consumers in his area of supply; *** (19) distribution system means the system of wires and associated facilities between the delivery points on the transmission lines or generating station connection and the point of connection to the installation of the consumers; *** (61) service line means any electric supply line through which electricity is, or is intended to be, supplied - (a) to a single consumer either from a distributing main or immediately from the Distribution Licensee's premises; or (b) from a distributing main to a group of consumers on the same premises or on contiguous premises supplied from the same point of the distribution main; *** (70) supply , in relation to electricity, means the sale of electricity to a licensee or consumer; (emphasis supplied) 50. The definition of 'supply' specifically states that supply means the sale of electricity to a consumer. The said definition does not indicate that supply of electricity is vis- -vis the premises of the consumer. Considering the overall scheme of the 2003 Act, the supply of electricity is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the payment of charges for electricity is on a person, that is, the consumer. Further, Section 56(2) specifically contains the expression no sum due from any consumer . Section 126 also uses the words the electricity charges payable by such person or any other person benefited by such use. Thus, the overall scheme of the 2003 Act makes it evident that only a consumer can be held liable for default in payment of electricity dues or charges. 55. Under the 2003 Act, the Central government has enacted various Rules and Regulations for carrying out the provisions of the Act. The government notified the Electricity (Rights of Consumers) Rules, 2020 Rules laying down the rights of the consumers of electricity. The Rules detail the rights of consumers and obligations of distribution licensees; release of new connections; metering arrangements; billing and payment; disconnection and reconnection; grievance redressal mechanism, among others. The Rules define an 'applicant' as an owner or occupier of any premises who files an application form with a distribution licensee for supply of electricity. The Rules defines 'point of supply' to mean the point, as may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , this Court also conceded that liability of previous owners could be fastened on auction-purchasers if the law so prescribed. 59. In Gujarat Inns (supra), another three-judge Bench of this Court held that the connection sought by auction-purchasers of properties would constitute a fresh connection. The Court held that in case of a fresh connection, the auction purchasers cannot be held liable to clear the arrears incurred by the previous owners in the absence of any specific statutory provision. It was observed: 3. In our opinion, the present two cases are cases of fresh connection. The learned Counsel for the Respondents (auction-purchasers) have stated that they have taken fresh connections and they have no objection if their connections are treated as fresh connections given on the dates on which the supply of electricity was restored to the premises. We are clearly of the opinion that in case of a fresh connection though the premises are the same, the auction-purchasers cannot be held liable to clear the arrears incurred by the previous owners in respect of power supply to the premises in the absence of there being a specific statutory provision in that regard. Though we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already provided. Even if the consumer is the same, but the premises are different, it will be considered as a fresh connection and not a reconnection. 62. In Gujarat Inns. (supra), this Court held that an application for electricity by an auction-purchaser will constitute fresh connection even though the premises are the same. The reasoning is based on the correct assumption that supply of electricity is with respect to the consumer, and not the premises. Therefore, even if the premises may be the same to which electricity had already been supplied, it will be considered as a fresh connection in the situation where a different applicant, in that case an auction-purchaser, applies for supply of electricity. IV. Regulatory power of the Electricity Boards/ State Commissions 63. The Electric Utilities have submitted that: (i) Section 49 of the 1948 Act empowered the Board to supply electricity upon such terms and conditions as it thinks fit; (ii) the phrase regulate in Section 79 of the 1948 Act has a wider implication allowing the State Commission to do everything necessary to prescribe the principles governing the supply of electricity; (iii) the Electricity Supply Cod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Boards could also prescribe conditions Under Section 21 of the 1910 Act by virtue of Section 26 of the 1948 Act. 68. Section 49 of the 1948 Act read as follows: 49. Provisions for the sale of electricity by the Board to persons other than licensees.- (1) Subject to the provisions of this Act and of Regulations, if any made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs. *** (emphasis supplied) Under the 1948 Act, the Electricity Boards were empowered to prescribe terms and conditions of supply Under Section 49 read with Section 79(j). The Board was empowered to fix such terms and conditions as it thinks fit for supply of electricity to any person not being a licensee. Section 79 permitted the Board to make Regulations providing for the principles governing the supply of electricity by the Board to persons other than licensees Under Section 49: 79. Power to make Regulations.- The Board may by notification in the Official Gazette, make Regulations not inconsistent with this Act and the Rules made thereunder to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the requisition for supply of energy by the Board is to be made under proviso (a) after a written contract is duly executed with sufficient security. This, together with the Regulations stated above, could be enough to clothe it with legal sanction. 71. In Hyderabad Vanaspathi (supra), a three-judge Bench of this Court had to decide upon the validity of Condition 39 of the Terms and Conditions of Supply prescribing an adjudicatory machinery for assessing and levying penal damages. This Court considered the legal provisions under the 1910 Act and 1948 Act to hold that terms and conditions notified Under Section 49 of the latter enactment were valid and had statutory force. The relevant paragraph is extracted below: 20. We have already seen that Section 49 of the Supply Act empowers the Board to prescribe such terms and conditions as it thinks fit for supplying electricity to any person other than a licensee. The Section empowers the Board also to frame uniform tariffs for such supply. Under Section 79(j) the Board could have made Regulation therefor but admittedly no Regulation has so far been made by the Board. The Terms and Conditions of Supply were notified in BPMs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the new owner or occupier of the premises. In India Thermal Power Ltd. (supra), the issue before the two-judge Bench was whether the State Government can alter the terms of the Power Purchase Agreement entered into Under Sections 43 and 43-A of the 1948 Act. Section 43 empowered the Board to enter into an arrangement with any person for purchase or sale of electricity. Section 43-A provided that the tariff for the sale of electricity by a generating company shall be determined in accordance with the norms regarding the operation and plant-load factor as determined by the Central Government from time to time. It was in light of these provisions, that this Court observed that every provision of an agreement entered into between a generating company and Electricity Board in exercise of the enabling power conferred Under Sections 43 and 43-A does not render the entirety of the contract statutory. The relevant observations are extracted below: 11. [...] Merely because a contract is entered into in exercise of an enabling power conferred by a statute that by itself cannot render the contract a statutory contract. If entering into a contract containing the prescribed terms and conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oper and reasonable Rules necessary for conduct of business. It was held: 3. It is settled law that the Rules validly made under the Act, for all intents and purposes, be deemed to be part of the statute. The conditions of the licence issued under the Rules form an integral part of the statute. The question emerges whether the word Regulation would encompass the power to fix rates of admission and classification of the seats. The power to regulate may include the power to license or to refuse the licence or to require taking out a licence and may also include the power to tax or exempt from taxation, but not the power to impose a tax for the revenue in Rule making power unless there is a valid legislation in that behalf. Therefore, the power to regulate a particular business or calling implies the power to prescribe and enforce all such proper and reasonable Rules and Regulations as may be deemed necessary to conduct the business in a proper and orderly manner. It also includes the authority to prescribe the reasonable rules, Regulations or conditions subject to which the business may be permitted or conducted. A conjoint reading of Section 5, Section 9, Rule 4 and condition 4-A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mphasis supplied) 78. In Paramount Polymers (supra), a two-judge Bench of this Court was called upon to decide the validity of Clause 21-A of Terms and Conditions of Supply which provided that no fresh connection in respect of the premises would be given to a purchaser unless the purchaser cleared the amount that was left in arrears by the previous consumer. The Court held that it was within the power of the Electricity Board to insert Clause 21-A in the Terms and Conditions of Supply Under Section 49 of the Supply Act: 15. [...] Under Section 49 of the Supply Act, the licensee or rather, the Electricity Board, is entitled to set down the Terms and Conditions of Supply of electrical energy. In the light of the power available to it, also in the context of Section 79(j) of the Supply Act, it could not be said that the insertion of Clause 21-A in the Terms and Conditions of Supply of electrical energy is beyond the power of the Appellant. (emphasis supplied) 79. As regards the 2003 Act, the Electric Utilities submit that Section 50 read with Section 181(2)(x) authorises the State Commission to frame the conditions governing Electricity Supply enabling recovery of electric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slation. JK Industries Ltd. v. Union of India, (2007) 13 SCC 673 The Rules or Regulations enacted by the Central Commission or State Commission cannot override the 2003 Act by stipulating inconsistent provisions or by supplanting the parent statute. 83. The 2003 Act empowers the State Commission to make Regulations on matters specified Under Section 181(2). In PTC India Ltd. v. Central Electricity Regulatory Commission (2010) 4 SCC 603 a Constitution Bench of this Court held that Regulations can be framed by State Commissions so long as they satisfy two conditions: first, they must be consistent with the provisions of Act; and second, they must be made for carrying out the provisions of the Act. The Court held: 28. The 2003 Act contemplates three kinds of delegated legislation. Firstly, Under Section 176, the Central Government is empowered to make Rules to carry out the provisions of the Act. Correspondingly, the State Governments are also given powers Under Section 180 to make rules. Secondly, Under Section 177, the Central Authority is also empowered to make Regulations consistent with the Act and the Rules to carry out the provisions of the Act. Thirdly, Under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 2003 Act. 86. The next question that arises for consideration is whether a Regulation providing for recouping the arrears of a previous consumer from the subsequent owner has a reasonable nexus with the provisions of the 2003 Act. Section 42 of the 2003 Act requires the distribution licensee to develop and maintain an efficient, coordinated, and economical distribution system in their area of supply to supply electricity in accordance with the provisions of the said Act. A distribution licensee is an intermediary, performing the function of conveying supply of electricity from generating companies to the consumer, at their premises. In order to provide a supply of electricity to consumers, a distribution licensee is required to lay down infrastructure such as electricity lines, transformers, and other equipment. The nature of the supply of electricity also depends upon the type of consumer as well their needs. The licensee has to make a significant capital outlay for creating the necessary infrastructure as well as operation and maintenance costs to keep the infrastructure in readiness according to Section 42. The licensees are required to maintain the infrastructure even if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quiries by designated officials. This Court observed that it was the statutory duty of the Board to supply, transmit, and distribute electricity throughout the state in the most efficient and economical manner. It was further observed that terms and conditions such as Clause 39 were necessary to prevent unauthorised use, pilferage or malpractices by the consumers. Such terms were necessary to recoup the loss suffered by pilferages, and to stop the continuation of similar malpractices. 90. Apart from protecting a public good, such conditions also have a reasonable nexus with objects of the 2003 Act, such as a robust development of the electricity industry, protecting the interests of consumers as well as the financial interests of the distribution licensees. The need to protect the financial interests of distribution licensees has been explicitly recognized in Section 61 of the 2003 Act which empowers the Appropriate Commission to specify the terms and conditions for the determination of tariff in accordance with commercial principles. The relevant part of the Section 61 reads as follows: 61. Tariff Regulations.- The Appropriate Commission shall, subject to the provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the charge does not arise, and electricity dues are simply an unsecured debt. On the other hand, the Electric Utilities submit that it is not even their case - in the absence of an express provision of law - that there is any mortgage or charge over the property in the form that the licensee would be a secured creditor. 94. Section 100 of the Transfer of Property Act 1882 contemplates two types of charges: charges created by act of parties and charges arising by operation of law. It inter alia provides as follows: 100. Charges: Where immoveable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained 1[which apply to a simple mortgage shall, so far as may be, apply to such charge]. Nothing in this Section applies to the charge of a trustee on the trust property for expenses properly incurred in the execution of his trust, [and, save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson who was in arrears of property tax. An auction purchaser, who became the owner of the property, resisted the attempt of the Municipal Corporation to recover the arrears of pending taxes in exercise of its charge on the ground that they were not aware of the past municipal tax arrears. The Corporation argued that the transferee was imputed with constructive knowledge of the charge created against the property due to Section 141 of the Bombay Provincial Municipal Corporations Act 1949. The Court held against the Municipal Corporation on the ground that in the facts of the case, the Plaintiff did not have constructive notice of the arrears of municipality. 99. While explaining the purport of Section 100, this Court held that the second half of Section 100 enacts a general prohibition and no charge can be enforced against property in the hands of a transferee for consideration without notice of the charge. In terms of Section 100, an exception to this Rule must be expressly provided by law. The Court held that whether a transferee has actual or constructive notice which satisfies the requirement of notice in the proviso to Section 100, must be determined in the facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, in Paschimanchal Vidyut Vitran Nigam (supra), this Court held that in the absence of any contract to the contrary, the amount payable towards supply of electricity does not constitute a charge on the premises. 103. Consequently, in general law, a transferee of the premises cannot be made liable for the outstanding dues of the previous owner since electricity arrears do not automatically become a charge over the premises. Such an action is permissible only where the statutory conditions of supply authorise the recovery of outstanding electricity dues from a subsequent purchaser claiming fresh connection of electricity, or if there is an express provision of law providing for creation of a statutory charge upon the transferee. 104. The next issue which falls for consideration is whether an electricity charge can be introduced by way of statutory Regulations or Rules enacted by a regulatory commission under its Rule making power in the 2003 Act. 105. Counsel for the auction purchasers have relied on Deputy Commercial Tax Officer, Park Town Division v. Sha Sukhraj Peerajee AIR 1968 SC 67, and Indian Council of Legal Aid and Advice v. Bar Council of India 1995 (1) SCC 732, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reof, restoration of supply of electricity and other cognate matters. In terms of Section 181 of the 2003 Act, the State Commission is empowered to make Regulations and Rules consistent with the Act which carry out the provisions of the Act. As held in the preceding paragraphs, the Rule making power contained Under Section 181 read with Section 50 is wide enough to enable the regulatory commission to provide for a statutory charge in the absence of a provision in the plenary statute providing for creation of such a charge. The State Commission is conferred with wide powers under the statutory framework to provide for different mechanisms in the Electricity Supply Code for recovery of electricity arrears of the previous owner. The recovery of electricity arrears may take effect either by requiring a subsequent owner of premises to clear payment of outstanding dues as a condition precedent for an electricity connection, or by deeming that any amount due to the licensee shall be a first charge on the assets, or by any other reasonable condition. 109. In exercise of such power, Regulation 10.5 of the Maharashtra Electricity Supply Code 2005 provides that any charge for electricity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the creation of a charge in terms of Section 100 of the Transfer of Property Act, 1882. Once it is established that a statutory charge is created and required notice was given, the charge attaches to the property and the licensee is entitled to recover the unpaid electricity dues by proceeding against the premises. Consequent to the charge created, Article 62 of the Indian Limitation Act, 1963 would come into play. Article 62 of the Limitation Act relates to enforcing the payment of money procured by mortgaged or otherwise charged upon the immoveable property. The electricity utilities would get a period of twelve years to recover the dues charged on the immoveable property from the date when the money payable became due. 113. In light of the above discussion, we are of the opinion that the electricity utilities can create a charge by framing subordinate legislation or statutory conditions of supply enabling recovery of electricity arrears from a subsequent transferee. Such a condition is rooted in the importance of protecting electricity which is a public good. Public utilities invest huge amounts of capital and infrastructure in providing electricity supply. The failure o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that (i) the limitation is with reference to the bar on disconnection by the licensee; (ii) no limitation is provided Under Section 56 after the electricity is discontinued for non-payment of dues; (iii) a valid and subsisting money decree in favour of the Electricity Board against the erstwhile owner of the premises would not be affected by the limitation period of two years; (iv) no time limit has been provided for cessation of the right of the licensee to demand past dues for giving a new connection to the premises; and (v) the right of the licensee not to give a connection till the outstanding dues are cleared is a continuing right and cannot be said to be extinguished. 116. On the other hand counsel representing the auction purchasers have urged that (i) the period of limitation Under Section 56(2), which begins with a non obstante clause, bars the recovery of outstanding electricity dues from successful auction purchasers who apply for a new connection for the supply of electricity from the licensee; (ii) two conditions need to be fulfilled to get over the embargo on the recovery of a sum due from any consumer, after a period of two years from the date when such sum beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m has been shown continuously as recoverable as arrear of charges for electricity supplied and the licensee shall not cut off the supply of the electricity. (emphasis supplied) 118. Section 56 falls under Part VI which is titled Distribution of Electricity . Section 56 provides for disconnection of electrical supply in case there is a default in payment of electricity charges. 119. The power to disconnect is a drastic step which can be resorted to only when there is a neglect on the part of the consumer to pay the electricity charges or dues owed to the licensee or a generating company, as the case may be. Section 56(1) provides that where any person neglects to pay any charge for electricity or any sum other than a charge for electricity due from him to a licensee or a generating company, the licensee or generating company may after giving a written notice of fifteen days, disconnect the supply of electricity, until such charges, including the expenses incurred are paid. The power to disconnect electricity is conditioned on the fulfilment of the conditions stipulated. The cutting off or disconnection is without prejudice to the rights of the distribution licensee to reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the recovery of dues on account of electrical charges. 122. Section 56(1) of the 2003 Act is pari materia to Section 24 of the 1910 Act. Section 24 of the 1910 Act empowered the Electricity Board to issue a demand and to discontinue supply to consumers who neglected to pay charges, without prejudice to the right to recover such charges or other sums by way of a suit. The import of Section 24 was considered by this Court in Isha Marbles (supra), where it was observed that the action of cutting off electricity supply after service of the notice as prescribed Under Section 24 was in addition to the general remedy of filing a suit for recovery. 123. In M/s. Swastic Industries v. Maharashtra State Electricity Board (1997) 9 SCC 465, this Court held that the right to discontinue supply of energy Under Section 24 was not taken away by Section 60A of the 1948 Act, which provided an option to the Electricity Board to file a suit within the period of limitation stipulated there. This Court observed that: 5. It would, thus, be clear that the right to recover the charges is one part of it and right to discontinue supply of electrical energy to the consumer who neglects to pay cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsumer prior to the enforcement of the Act. In terms of Section 6 of the General Clauses Act 1897, the liability incurred under the previous enactment would continue and the claim of the licensee to recover electricity would be governed by the regulatory framework which was in existence prior to the enforcement of the 2003 Act. 126. In its report dated 19 December 2002, the Standing Committee of Energy opined that the restriction for recovery of arrears Under Section 56 was considered necessary to protect the consumer from arbitrary billings. Standing Committee of Energy-Thirteenth Lok Sabha, The Electricity Bill 2001-Thirsty First Report, Ministry of Power (2002) In other words, the enactment of Section 56(2) was to address the mischief of arbitrary billings. Hence, Section 56(2) was incorporated to ensure that a licensee does not abuse its special power of disconnection of electrical supply. Section 56(2) ensures that a licensee does not have the liberty to arbitrarily impose a bill after a long period and then recover such a huge amount through the drastic step of disconnection of electrical supply. 127. In Rahamatullah Khan (supra), a two judge Bench of this Court dealt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the licensee company raised an additional demand on 18-3-2014 for the period July 2009 to September 2011. The licensee company discovered the mistake of billing under the wrong Tariff Code on 18-3-2014. The limitation period of two years Under Section 56(2) had by then already expired. 9.1. Section 56(2) did not preclude the licensee company from raising an additional or supplementary demand after the expiry of the limitation period Under Section 56(2) in the case of a mistake or bona fide error. It did not, however, empower the licensee company to take recourse to the coercive measure of disconnection of electricity supply, for recovery of the additional demand. (emphasis supplied) 128. The exposition of law by this Court in Rahamatullah Khan (supra) was considered by a coordinate bench in Prem Cortex (supra). A consumer was served with a short assessment notice and the Court had to consider whether short billing and the subsequent raising of an additional demand would tantamount to a deficiency of service. This Court observed that the bar contemplated in Section 56 operates on two distinct rights of the licensee, namely, the right to recover and the right to disconnect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 56 relate to the remedy of disconnection of electric supply. The right to recover still subsists. 130. We may also briefly deal with the objection of the auction purchasers that the conditions of supply cannot be used to resurrect time barred debts. Counsel placed reliance on VT Kallianikutty (supra), where it was held that a time barred debt cannot be recovered by taking recourse to the provisions of the Kerala Revenue Recovery Act. This decision is not helpful to the auction purchasers in the present batch of cases. In that case, a three-judge Bench of this Court while dealing with agricultural loans extended by the Kerala Finance Corporation, held that since the Kerala Revenue Recovery Act does not create a new right, a person could not claim the recovery of amounts which are not legally recoverable. In reaching its decision, this Court, however, reasoned that the statute of limitation bars the remedy by way of a suit beyond a certain time period, without touching the right to recover the loan. The right remains untouched and it can be exercised in any other suitable manner provided. 131. We therefore, reject the submission of the auction purchasers that the recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h (2009) 4 SCC 660, a two-judge Bench of this Court explained the characteristics of a public auction in the context of the maintainability of a consumer complaint. This Court held that where existing sites are put up for sale or lease by public auction and the sale is confirmed in favour of the highest bidder, the resultant contract relates to sale or lease of immovable property, and not a provision of service or sale of goods. This Court delved into the nature of public auctions and opined on the implications of an auction conducted on an as is where is basis , where an auction purchaser is expected to exercise due diligence with regard to the condition of a site. The Court observed: 19. .... In a public auction of sites, the position is completely different. A person interested can inspect the sites offered and choose the site which he wants to acquire and participate in the auction only in regard to such site. Before bidding in the auction, he knows or is in a position to ascertain, the condition and situation of the site. He knows about the existence or lack of amenities. The auction is on `as is where is basis'. With such knowledge, he participates in the auction and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions. Evidently, the commercial plots were allotted on as is where is basis. The allottees would have ascertained the facilities available at the time of auction and after having accepted the commercial plots on as is where is basis, they cannot be heard to contend that PUDA had not provided the basic amenities like parking, lights, roads, water, sewerage etc. If the allottees were not interested in taking the commercial plots on as is where is basis, they should not have accepted the allotment and after having accepted the allotment on as is where is basis, they are estopped from contending that the basic amenities like parking, lights, roads, water, sewerage etc. were not provided by PUDA when the plots were allotted.... (emphasis supplied) 136. In Kenneth Builders and Developers (supra), in the circumstances arising in that particular case, this Court refused to accept the seller's reliance on the as is where is condition and held that refusal of the Delhi Pollution Control Committee, DPCC to grant permission to the auction purchaser, frustrated the Development Agreement which was entered into between the seller, Delhi Development Authority, DDA and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed its implementation. 35. Reliance by the learned Counsel for DDA on the as is where is concept as well as Clause 6 and 11 of the Development Agreement in this context is misplaced. As mentioned above, this primarily pertains to physical issues at site.... (emphasis supplied) 137. Reliance placed by the auction purchasers on Raghu Nath Gupta (supra) and Kenneth Builders and Developers (supra) to contend that as is where is is a feature of physical property, limited to encumbrances or charges running with land, is misconceived. In both the cases relied upon by the auction purchasers, the judgments were rendered on the peculiar facts at hand. In Raghu Nath Gupta (supra) this Court was dealing with the availability of basic facilities like parking, lights, roads, water and sewerage, but the application of the doctrine of as is where is was not limited to only physical features of the property. Further, in Kenneth Builders and Developers (supra) based on the facts, this Court opined that a sale on as is where is could not be interpreted to mean that the auction purchaser would be responsible to take permission for the initial commencement of construction itself, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dering an auction sale under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002. SARFAESI Act The Court analysed Clauses 24 and 26 of the auction notice, which stipulated an as is where is sale with respect to all statutory dues and absolved the authorised officer of all liabilities for any charge, encumbrances and dues, including electricity dues. It concluded that the auction purchaser was clearly put to notice since there was a specific mention of the quantification of dues of various accounts including electricity dues. On the liability of the past owners to bear electricity dues when the sale is on as is where is and existence of electricity dues is specifically mentioned, this Court categorically held that the auction purchasers were bound to inspect the premises and provide for the dues in all respects. This Court observed: 16.2. Where, as in cases of the E-auction notice in question, the existence of electricity dues, whether quantified or not, has been specifically mentioned as a liability of the purchaser and the sale is on AS IS WHERE IS, WHATEVER THERE IS AND WITHOUT RECOURSE BASIS , there can be no doub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for supply of electricity to the premises. The cause of action arises when a fresh connection or reconnection is sought by the auction purchaser. This has also been reiterated in the decision of this Court in Paramount Polymers (supra). This Court observed: 11. ..... We are also not in a position to agree with the High Court that the relevant date is the date of sale of the undertaking by the Financial Corporation to the first Respondent. The insertion of Clause 21-A was circulated by the communication dated 27-11-2001 and it was subsequently followed by the formal notification in terms of Section 49 of the Supply Act read with Section 79(j) of that Act. The first Respondent having applied for a fresh connection only on 1-1-2002, the application would be governed by the Terms and Conditions including the term inserted on 27-11-2001, as subsequently formally notified. In the writ petition filed on 27-2-2002 in that behalf, the Court could not have come to the conclusion that the application made by the first Respondent was not governed by the amended Terms and Conditions of Supply including Clause 21-A thereof.....On our interpretation of Clause 21-A of the Terms and Condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be refunded. But the amount already remitted by him/her shall not bear any interest) 146. In terms of Clause 15(c), when there is a transfer of ownership or right of occupancy of the premises, the registered consumer shall intimate the transfer of the right of occupancy of the premises within seven days to the officer concerned. On such intimation being received, the service shall be disconnected. If the transferee desires a service connection, they shall pay off the dues and apply for transfer of the ownership of the service connection. In terms of Clause 15(d), all dues to the KSEB from a consumer shall be the first charge on the assets of the consumer. In terms of Clause 15(e), a new connection or reconnection shall not be given to any premises where there are arrears on any account unless they are cleared in advance. 147. The validity of Clause 15(e) was upheld by a Full Bench decision of the Kerala High Court in Suraj v. KSEB 2005 (3) KLT 856. The High Court upheld the validity of the said Regulation on the ground that it is unjust to compel the Board to supply electricity to the very same premises without the arrears of the previous owner or occupier being cleared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) The assets are sold on As Where is and Whatever there Is condition. (d) The assets are sold on the assumption that the tendered have inspected the assets, know what they are tendering for, whether they have inspected or not and the principle of 'Caveat Emptor' will apply. 150. The Appellant sought permission of the KSEB for wiring for an electricity connection in the property by a letter dated 4 June 1999. Wiring permission was rejected by KSEB due to the outstanding dues of the erstwhile owner, and it was stated that a new connection would be provided if the Appellant was ready to remit the amount due from the previous consumer. 151. In the interregnum, KSEB filed a claim petition before the Company Court in a company petition Company Petition 15 of 1994 claiming a sum of Rs. 86,54,711 from Pearlite Wire Products Ltd., which was in liquidation. The claim petition was admitted for Rs. 63 lakhs. The Appellant filed a company application Company Application 349 of 1999 in Company Petition 15 of 1994 seeking a direction to the KSEB to not insist on payment of arrears of electricity charges by the auction purchaser, which were due from the company in liquidat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reeable to both parties. This Court observed: Balancing the equities as they arise in the present case would be a delicate task, and whichever way we decide this case the losing party may feel that justice has been denied to it. At the same time, we cannot lose sight of the fact that the Appellants have made huge investments as claimed by them, and only the interest component on such investment may create a huge liability as against the Appellant. On the other hand, if the industry starts functioning, perhaps the Electricity Board will also stand to gain. We have no doubt that instead of litigating, if the parties could have settled the dispute, both would have benefited to a great extent. However, no settlement could be reached. 155. We are of the view that the Kerala High Court was correct in upholding the validity of Clause 15(e). Clause 15 of the Conditions of Supply of the Electrical Energy, which is statutory in character, unequivocally provides that the Board is not obligated to give reconnection or a new connection in the premises where there are any arrears of electricity charges from a previous consumer, unless the arrears including penalty are cleared by the new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ric connection was made on 1.12.1989. The review petition filed by the Appellant was dismissed on the ground that the High Court's decision in Ramachandran (supra) took into consideration the ratio in Isha Marbles (supra) and thereafter upheld the action taken by the Respondent-Board. 159. This Court issued notice on 7 January 2004, and granted leave on 2 April 2004. Recovery proceedings were stayed on 5 May 2006. 160. The Appellant has submitted in the course of the written submissions that the impugned Regulation would apply prospectively as subordinate legislation made by a delegate cannot have retrospective effect unless Rule making power in the concerned statute expressly or by necessary implication confers power in this behalf. Reliance placed on State of Madhya Pradesh v. Tikamdas, (1975) 2 SCC 100 It was further stated that the Appellant had applied for electricity connection on 1 December 1989, before the Conditions of Supply came into force. It has been urged that in the absence of any existing statutory Regulations, the Appellant cannot be called upon to clear the past arrears incurred by the erstwhile consumer as a condition precedent to electricity supply. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 29 of the State Financial Corporation Act 1957 (sic 1951). The Circular presented prospective owners who purchased sick/ closed industrial units in auction with two options - either pay arrears including minimum charges to get electricity supply reconnected, or apply for a fresh connection after completing necessary formalities, without being liable for outstanding arrears of the previous owner. The circular further provided that Condition 23(b) of the MSEB Conditions of Supply would not apply to prospective consumers with effect from 1 April 1993. 166. The circular was withdrawn by the Circular 607 dated 19 December 1998, whereby it was mandated that reconnection or fresh connection would be released only after the arrears of the Electricity Board are cleared. The circular purported to emanate from Condition 23(b) of the Conditions of Supply, as framed by the MSEB. The circular was made operative with immediate and prospective effect. 167. In light of the impugned judgments of the Bombay High Court, which are in appeal before us, MSEB by its Circular 684 dated 25 September 2003 allowed auction purchasers of closed/ sick industrial units to exercise either of the optio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in character, as held by this Court in Hyderabad Vanaspati (supra). The Conditions of Supply are in addition to and not in lieu of other modes of recovery; b. MSEB Conditions of Supply are a part of the standard agreement entered into between the consumer and the Electricity Company. Clause 14 of the standard agreement between the Electricity Board and the consumer incorporates the Conditions of Supply as a part of the agreement; c. The reliance placed by the Bombay High Court on the judgment in Isha Marbles (supra) cannot be sustained since the case of Isha Marbles (supra) is distinguishable on facts; d. The General Auction Conditions of Sale of SICOM in Clause 2 stipulate that the sale is on as is where is and what is basis. Auction purchasers were put on notice of their liability for the past electricity arrears due to the inclusion of the standard auction proclamation (Clause 6) while inviting bids; e. Regulation 10.5 of Maharashtra Electricity Supply Code 2005 explicitly states that any unpaid electricity dues shall be a charge on the premises transferred; and f. All six cases pertain to the period prior to 2005 i.e., before the enactment of the Maharashtra E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, the Respondents were successful auction purchasers who purchased the premises in court auction sales. The Appellant-Board relied on Condition 23 of the MSEB Conditions of Supply to impose a precondition of clearing electricity arrears of the erstwhile consumer, before a new electricity connection could be provided. The High Court in all the cases directed the Appellant-Board to provide reconnection or fresh connection to the Respondents, without insisting on payment of arrears. 174. These impugned judgments raise a common question on the applicability and the scope of Condition 23. This Court would first deal with the overall argument on the applicability of Condition 23 of the MSEB Conditions of Supply, and its interpretation, before delving into the specific factual matrix of the cases. 175. In Maharashtra State Electricity Board v. Super Stainless Hi Alloys Ltd., Civil Appeal 5312-5313 of 2005 the Bombay High Court relied on the decision of this Court in Isha Marbles (supra) to quash the impugned circular dated 19 December 1998 for lack of jurisdiction as it was held to be beyond the powers of the Electricity Board Under Section 24 of the 1910 Act. The High Court co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 23 does not impose any liability on a transferee occupying the premises of the erstwhile consumer on account of having acquired right by public auction or any other mode of non-voluntary transfer. 179. The Electricity Board can demand arrears due by an erstwhile defaulting consumer in regard to supply of electricity to premises from the purchaser of a property seeking reconnection or fresh connection of electricity when either of two conditions are met: a. An express provision exists in law providing that electricity arrears constitute a charge over the property. For the statutory charge to be enforced against the property in the hands of a person to whom such property has been transferred for consideration, the transferee must have notice, either actual or constructive, of the charge; and b. The statutory Regulations or terms and conditions of supply which are statutory in character, authorise the supplier of electricity to make such a demand. 180. In general law, electricity arrears do not constitute a charge over the property. Under the provisions of the 1910 Act read with the1948 Act, electricity arrears do not create a charge over the property. In the cases befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 13(10)(b) of the Orissa Electricity Regulatory Commission Distribution (Conditions of Supply), Code, 2004 was inapplicable to the facts of the case as the auction purchaser had requested for a fresh connection, whereas in terms of the concerned Regulation, previous dues had to be cleared only with respect to a reconnection or a transfer of service connection from the name of the erstwhile consumer. 186. The submission of the Appellant on the applicability of Condition 23 rests on the meaning and scope of Condition 23 in relation to the liability of a person who becomes the new owner or occupier of the premises of the erstwhile consumer, to which electricity was being supplied. Condition 23 is extracted below: Clause 23: Assignment or Transfer of Agreement a) The consumer shall not without previous consent in writing of the Board, assign, transfer or part with the benefit of his Agreement with the Board nor shall the consumer in any manner part with or create any partial or separate interest thereunder. b) A consumer who commits breach of condition 23(a) above and neglects to pay to the Board any charges for energy or to deposit with the Board amount of security deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stries Ltd. v. Collector of Customs, (2002) 4 SCC 297 189. For the application of the ejusdem generis rule, it is essential that enumerated things before the general words must constitute a distinct category or a genus or a family which admits of a number of members. Lokmat Newspapers (P) Ltd. v. Shankarprasad, (1999) 6 SCC 275; Jaiprakash Associates Ltd. v. Tehri Hydro Development Corporation (India) Ltd., (2019) 17 SCC 786 In Adoni Cotton Mills Ltd. v. Andhra Pradesh State Electricity Board (1976) 4 SCC 68, this Court had to interpret Section 49(3) of the 1948 Act, which empowered the Electricity Board to fix different tariffs for the supply of electricity to any person having regard to the geographical position of any area, the nature of supply and purpose for which the supply is required and any other relevant factors. This Court refused to limit the generality of other relevant factors since there was no genus of the enumerated factors. Geographical position of the area and the nature and purpose of the supply were held not to be related to any common genus. 190. In the impugned judgment Ecto Spinners, the Bombay High Court observed that the word successor , occurs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he defaulting consumer can be understood with regard to the former corresponding phrase dies, or transfers, assigns or otherwise dispenses of the undertaking or the premises . 194. In the case at hand, the use of the expression otherwise dispenses of in the phrase a consumer...dies, or transfers, assigns or otherwise dispenses of the undertaking or premises'', does not bring into play the Rule of ejusdem generis for the preceding words dies , transfers , assigns do not belong to a single limited genus. 195. The word transfer itself is generally regarded to have a wide connotation, comprehending within it both voluntary and involuntary transfers. In Mangalore Electric Supply Co. Ltd. v. The Commissioner of Income Tax, West Bengal (1978) 3 SCC 248, a three-judge Bench of this Court held that a compulsory acquisition of property can constitute a transfer within the meaning of Section 12B(1) of the Indian Income Tax Act 1962 (sic 1922). It rejected the argument that the word transfer must be construed ejusdem generis with the preceding words sale , exchange , relinquishment . On the wide amplitude of the word 'transfer', this Court observed: 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15) 5 SCC 718 Condition 23 of the MSEB Conditions of Supply is a mode of recovery of electricity arrears of the erstwhile consumer, which could be recovered even from a successor. The MSEB, in our opinion, intended to cover all possible cases of transfer of the undertaking or premises of the erstwhile consumer, be it voluntary, on account of death of the consumer, or by operation of law. Circular 518 dated 18 June 1993 and Circular 607 dated 19 December 1998 issued by the MSEB emanated from Condition 23 of the MSEB Conditions of Supply. They contained directions vis- -vis power supplied to those property owners who purchased sick and closed industrial units. The context and the purpose of the statutory terms and conditions of supply demand that a broader construction should be adopted, and there is no room for the application of the Rule of ejusdem generis. 198. On our interpretation of Condition 23 of the MSEB Conditions of Supply with particular reference to Sub-clause (b) thereof, we are of the view that the said Sub-clause is applicable to involuntary transfers, such as court auctions. 199. Applying the above considerations to the appeals our conclusions are as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affect the rights of the auction purchasers who purchased sick/ closed industrial units Under Section 29 of the State Financial Corporation Act 1951 as the sale was not voluntary . As discussed above, Condition 23 is of wide import, which covers sale of property made in court auctions. Furthermore, Section 29(2) of the State Financial Corporation Act provides that a sale Under Section 29 which resulted in transfer of property shall vest in the successor all rights in the property transferred as if the transfer has been made by the owner of the property. Accordingly, a sale made by the corporation is deemed to be a sale made by the owner of the property, attracting Condition 23 of the MSEB Conditions of Supply. 204. It is necessary to reproduce some of the relevant clauses of the General Auction Conditions of Sale of properties put on sale by SICOM. The clauses are extracted below: Clause 4: The purchaser may take inspection of the property to be sold. Even if the purchaser does not take inspection, he shall be deemed to have inspected all the assets put up for sale on As is where is and what is basis in regard to the condition thereof, before making the offer for purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra State Electricity Board v. M/s. Umang Enterprises; Civil Appeal No. 5314 of 2005 207. The first Respondent was a successful auction purchaser of the property of M/s. Creekay Yarn Industries Ltd., which was put to sale in consequence of an arbitral award. The Respondent-purchaser took out a Judges Order Judges Order No. 10 of 2003 in Civil Suit No. 2978 of 1991 in a civil suit before the Bombay High Court, seeking a clarification that it was not liable for past dues and liabilities of any kind in respect of the property purchased through the auction sale. The Bombay High Court by its order dated 29 January 2003 declared that the Respondent-purchaser was not liable to pay any arrears payable by the erstwhile owner. The Appellant alleges that this order was passed ex-parte. The order of the Bombay High Court in Judges Order dated 29 January 2003 has not been placed on record before this Court. 208. The Respondent-purchaser requested the Appellant for a new electricity connection, which was denied on 6 June 2003 on the ground that the Respondent was not eligible for a new connection unless the dues of the erstwhile consumer were discharged in terms of Condition 23 of the MS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inning mill, was closed down. The electricity supplied to M/s. Prabhavati Spinning Mill had earlier been disconnected by the Appellant in default of payment of consumption charges. In 2004, the first Respondent purchased M/s. Prabhavati Spinning Mill, which was liquidated by the authorities under the Maharashtra Co-operative Societies Act 1960. The agreement of sale was executed in favour of the first Respondent on 26 July 2004 and since then, the first Respondent had the possession of the property. The final deed of assignment was yet to be executed. The first Respondent incurred an expenditure of Rs. 4 crores to overhaul the plant and machinery at the premises, and thereafter applied for a fresh electricity connection as a High Tension Consumer for the premises. Meanwhile, the plots were transferred by the Maharashtra Industrial Development Corporation to the first Respondent on 4 February 2005. The Appellant, however, relied on the MSEB Conditions of Supply and the agreement entered with the erstwhile consumer to decline granting electricity connection until the arrears of the erstwhile consumer were cleared. The Respondent filed a writ petition before the Aurangabad Bench of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty hereby assigned in on as is where is and as is what is basis. The Bank does not undertake any liability or responsibility to procure any permission/licence etc. in respect, of the property offered for sale or for any dues like water/service charges of the MIDC, transfer fees, electricity dues and charges for fresh power connection, Local Authority, or Nazul/NIT dues, in respect of the said property and the same shall be solely and exclusively borne and paid by the Purchaser. 218. The first Respondent applied for a fresh electricity connection for the premises. The Appellant-MSEDC refused the request of the first Respondent by a letter dated 9 September 2005 on the ground that the arrears of electricity charges of the earlier owner were pending, and the first Respondent was liable to clear them in light of Condition 23 of MSEB Conditions of Supply. The Bombay High Court by its impugned judgment dated 12 December 2005 held that Condition 23 was inapplicable and directed the Appellant to grant a fresh connection to the first Respondent, if otherwise eligible. The High Court observed that Condition 23 intended to apply to voluntary acts of the original consumer by which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are transferred Under Regulation 10.5 are restricted to a maximum period of six months of the unpaid charges for electricity supplied to the premises. Accordingly, the dues owed by M/s. Sumit Re-Rolling Mills Pvt. Ltd, Nagpur are charged on the property purchased by the first Respondent in a public auction. 223. The sale was conducted on as is where is basis and the Respondent accordingly had adequate notice of the charge. Hence, the distribution licensee is entitled to recover the unpaid dues from the first Respondent subject to the permitted period specified in the proviso to Regulation 10.5. 224. In view of the aforesaid legal position, which has emerged, we are of the view that the impugned order of the High Court cannot be sustained. The appeal is allowed. Item 101.13: Maharashtra State Electricity Board v. M/s. Jai Tirath Financiers Pvt. Ltd.; SLP(Civil) No. 10732 of 2006 225. In 1999, liquidation proceedings were initiated against M/s. Hariganga Alloys Steel Ltd. By a sale notice dated 2 May 2001, offers were invited from interested bidders for purchase of properties of M/s. Hariganga Alloys Steel Ltd. on as is where is and as is what is basis. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or disposing the petition on the ground that it had become infructuous. The Appellant in the reply affidavit has contested the IA on the ground that even though the principal amount of Rs. 83 lakhs has been paid towards arrears, interest charges to the tune of approximately Rs. 2 crore on the principal amount are still to be recovered. 231. Since the Respondent applied for electricity connection on 17 June 2005, the Maharashtra Electricity Supply Code 2005, which came into force from 20 January 2005, is applicable in the instant case. Accordingly, a charge was created on the electricity arrears in terms of Regulation 10.5. At the same time, the Court cannot be oblivious to the commercial exigencies in view of which the settlement proposal was complied with. The Appellant has recovered an amount of Rs. 83 lakhs. In the facts and circumstances of the case it would be iniquitous to direct the payment of interest at this stage. We therefore direct a closure of the dispute in the above terms in the exercise of the jurisdiction Under Article 142 of the Constitution. 232. In the circumstances, it is not possible to entertain the appeal at this stage. The appeal is accordingly dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been urged that the Respondent is liable to pay the dues in view of Condition 23(b) of the MSEB Conditions of Supply. Mr. MY Deshmukh, counsel appearing on behalf of the first Respondent has urged that the MSEB Conditions of Supply 1976 are inapplicable after the enactment of the Maharashtra Electricity Supply Code 2005. 237. The Respondent has in its written submissions has brought to the attention of this Court the suit for recovery Spl. Civil No. 104 of 2003 initiated by the Appellant against the erstwhile owner. During the pendency of the present appeal, the trial court by an order dated 30 September 2009 passed a decree in favour of the Appellant for the debt due from the erstwhile consumer and its proprietor in respect of the arrears of electricity bills. The first Respondent has urged that in view of the decree, the Appellant ought to have withdrawn the present appeal instead of protracting the litigation. 238. At the outset, we would deal with the submissions on the applicability of the 2003 Act. The electricity connection was permanently disconnected in 2002, and the first Respondent acquired ownership rights in the premises in 2005. The first Respondent made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charge for electricity from a person to whom the property is transferred or the occupier of the said premises where new electricity connection is sought in terms of Regulation 10.5. 242. The counsel for the Respondent has urged that although the decree in the civil suit was passed in favour of the Appellant on 30 September 2009, the Appellant has failed to execute it till date. The distribution licensee should not let arrears mount up and must be prompt in disconnecting electricity supply and thereafter pursuing its remedy by filing a suit for recovery of moneys/ dues. It becomes the bounden duty of the distribution licensee to diligently pursue the decree awarded and recover amounts from the real defaulter. Any amount that may have been realised in the execution of the decree would have to be given due credit for in determining the amount payable by the Respondent. 243. In view of the reasons which have been adduced earlier, we allow the appeal and set aside the order of the High Court. III. Gujarat 244. In Gujarat, the right of the Electric Utilities to demand outstanding dues is traceable to the following provisions: a. Up to the enactment of the 2003 Act on 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be refunded to the new consumer/owner or occupier from whom the dues have been recovered after adjusting the expenses to recover such dues. The High Court of Gujarat had occasion to deal with the validity of Clause 2(j) of the Conditions of Supply and Clause 4.1.11 of the Gujarat Electricity Supply Code. Item 101.2: M/s. Navyug Steel Cast and Anr. v. Paschim Gujarat Vij Co.; Civil Appeal No. 7303 of 2005 245. On 10 August 1998, a petition for winding up of Anik Steel Ltd. was filed wherein an order for winding up of the company was passed and an Official Liquidator was appointed. By an advertisement dated 21 December 2001, the Official Liquidator invited tenders for the auction sale of the property of the previous owner. The Appellant submitted an offer of Rs. 35.5 lakhs for purchase of the property on an as is where is basis. The offer letter specified that the Petitioner shall not be responsible for any of the past dues of the Gujarat Electricity Board, Excise and Customs Department, Sales Tax and Income Tax Department and of any outsiders whether it is Government, Semi-Government Corporations and/ or Board, Bank or of any private parties . After inter se bidding, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... July 2002, the High Court passed an order confirming the sale in favour of the Appellant on the terms and conditions mentioned in the order. The terms and conditions of the auction sale show that the property was sold on an as is where is basis to the Appellant. The Appellant has relied on Condition 10 to argue that it was only liable to pay charges accrued after the date of winding up order. It has been further averred by the Appellant that the arrears are for a period before the date of winding up order, which is 10 August 1998. The facts of the case make it evident that the Appellant requested supply of electricity by a letter dated 12 August 2002. In the present case, the payment of electricity dues, being statutory in nature, cannot be waived. The auction conditions are subservient to the statutory demand made under Condition 2(j) of the Conditions of Supply. Therefore, we uphold the impugned judgment of the High Court. 249. Before parting, we would like to highlight that by an order dated 18 November 2011, this Court directed the Appellant to deposit Rs. 25 lakhs with the Respondent and secure the balance principal amount by giving a bank guarantee of a nationalised ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent No. 1 and for the balance the applicant is ready to submit the bank guarantee and/ or is ready to deposit the whole amount with this Hon'ble Court as security. We allow the above application in the interests of equity, justice, and fairness to the extent that the Appellant is only liable to pay the principal amount of Rs. 126 lakhs and any outstanding interest accrued prior to the date of application for supply of electricity. Item 101.3: Torrent Power AEC Limited v. M/s. Shreeji (Rakhail) Commercial Cooperative Housing Society Limited and Ors.; SLP (C) No. 2880 of 2007 251. The Appellant is an electric utility engaged in distribution and retail supply of electricity in Ahmedabad. Raipur Manufacturing Company Ltd., the previous owner, became liable to pay an amount of Rs. 12 crores towards electricity dues together with running interest thereon. On account of the outstanding debt, the Appellant disconnected electricity supply to the premises of the company at Ahmedabad on 15 July 1999. In 2001, winding up proceedings were filed against the previous owner before the Company Court of the High Court of Gujarat. The sale of property of the previous owner was sanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered the purport of the Regulation 4.1.11 of the Gujarat Electricity Supply Code and held that it was not applicable to the Respondent. According to the High Court, the sole reason that Regulation 4.1.11 of the Gujarat Electricity Supply Code was inapplicable was because the said Regulations only applied to the electricity dues of the applicant, and did not make the applicant liable to clear the dues of the previous owner. 255. The High Court omitted to notice that the Gujarat Electricity Supply Code came into force with effect from 31 March 2005 while the Respondent applied for electricity connection on 13 August 2004. Hence, the Respondent had applied for a connection before the coming into force of the Gujarat Electricity Supply Code. Thus, the said Regulations will not be applicable to the facts of the present case. 256. Since the Respondent applied for electricity connection on 13 August 2004, the 2003 Act and the Rules and Regulations made thereunder are inapplicable in the instant case. It has been admitted by the Appellant that there was no statutory condition requiring the Respondents to pay the outstanding electricity dues of the previous owner at the point of ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Due to non-payment of energy bills, the agreement with the power supply company was terminated with effect from 01 February 1995. In 1995, the Appellant filed a suit for recovery of Rs. 3.41 lakhs against the previous owner before the Civil Judge, Sr. Division, Valsad. In 2002, the suit was decreed in favour of Gujarat Electricity Board, which was the predecessor of the Appellant. Arunesh Processors Pvt. Ltd. was wound up in 2002 and its assets were auctioned by the Bombay High Court on an as is where is basis . The Respondent participated in the auction proceedings and acquired the assets of Arunesh Processors Pvt. Ltd. at Vapi, Gujarat. The sale was confirmed in favour of the Respondent for Rs. 70 lakhs on 11 August 2005 by the Bombay High Court. Thereafter, on 12 December 2008 a deed of conveyance was executed between the Official Liquidator, High Court of Bombay and the Respondent. In 2010, the Appellant filed Darkhast No. 7 of 2010 for execution of the decree passed in the suit in 2002. 260. On 16 December 2010, the Respondent approached the Appellant requesting it to release power supply to the plot at Vapi, Gujarat. On 03 January 2011, the Appellant informed the Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing a condition that the dues relating to particular premises should be cleared before electricity supply is restored or a new connection is given to the premises cannot be termed as arbitrary or unreasonable. To reinforce their argument, the Appellant has relied upon the observations made by this Court in Paschimanchal Vidyut Vitran Nigam (supra). 263. On the other hand, the Respondent contended that there is no provision under the 2003 Act enabling the distribution licensee to impose a pre-condition of the clearance of dues relating to the previous owner or their premises. It has been further argued that Clause 4.1.11 affixing the dues to the premises is contrary to Section 43 of the 2003 Act, which affixes the liability to pay electricity dues and charges on the consumer. The dues relating to the premises would be a financial encumbrance on the property, and as such would be transferred with the sale of the land. 264. In the instant case, the first part of Clause 4.1.11 provides that an application for electricity supply for any premises need not be entertained unless any dues relating to the premises have been cleared. The said Clause indicates that a distribution license ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions to recover dues of a previous consumer from a subsequent owner or occupier. We disagree with this reasoning of the High Court in view of our analysis in the preceding paragraphs, where we have held that the Electric Utilities can specify the requirement that the subsequent owner or occupier of the premises has to pay the arrears of electricity dues of the previous consumer as a pre-condition for the grant of an electricity connection. However, such terms and conditions of supply should be valid and reasonable by conforming to the overall scheme and purpose of the 2003 Act. 268. Consequently, we set aside the impugned judgment of the High Court dated 2 December 2012. Any pending IAs are disposed of accordingly. Item 101.5: Madhya Gujarat Vij Co. Ltd. v. Agriculture Produce Market Committee, SLP (C) No. 8197-8198 of 2014 269. Rajprakash Spinning Mills Ltd. RSML was a consumer of the Gujarat Electricity Board since 1967. On 31 December 1994, its power was disconnected due to the non-payment of electricity dues. On 18 July 1995, the Gujarat Electricity Board instituted a suit in the Civil Court, Nadiad against RSML for recovery of electricity charges amounting to Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Shashwat Homes Private Limited; SLP No. 19878 of 2007 274. Gujarat Steel Tubes Company GSTC , the previous owner, was subjected to liquidation proceedings and the electricity connection was disconnected for non-payment of dues amounting to Rs. 1.5 crores. GSTC was ordered to be wound up by the Gujarat High Court. A parcel of the GSTC's land was bought in auction by Spectra Enterprises Private Limited for a sum of Rs. 42.10 crores. In 2006, the name of the Respondent came to be mutated in the revenue records pertaining to the said parcel of land. On 24 January 2007, the Respondent approached the Appellant seeking a new connection for electricity in respect of the premises. The Appellant declined to grant a new connection pending the payment of the outstanding electricity dues of the previous owner. The Respondent instituted a writ petition before the Gujarat High Court. By the impugned judgment dated 31 January 2014, the High Court held that the subsequent owner is not liable to pay the electricity dues of the previous owner. 275. The Respondent approached the Appellant for seeking a new electricity connection on 24 January 2007. At the relevant time, the 2005 Elect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blished in Gujarat Samachar in 2003 under which the land was to be sold on as is where is basis . The relevant extract of the notice is set out below: As per the order of the B.I.F.R., the land situated at Vijalpore bearing Survey No. 336/1, 311, 310/1, 310/2, 310/5, 310/7, 307/1, 308/1 having ownership of Navsari Cotton and Silk Mills, out of total admeasuring area of the land, 11 Lakh square feet land with possession is to be given on AS IS WHERE IS BASIS as per the prevailing laws and rules. 279. The Assets Sale Committee accepted the offer made by Respondent for a consideration of Rs. 561 lakhs for the surplus land. The sale deed dated 29 May 2003 mentioned that the additional open land was free from all encumbrances including lien and charge. Clause 9 further specified that all taxes, land revenue, education cess, and other outstanding dues up to date has been paid and if any dues remain unpaid that is to be paid by the Company. 280. On 01 December 2004, the Respondent applied for a new connection. However, the Appellant refused to grant a new connection until the outstanding dues were cleared in terms of Clause 2(j) of the Conditions of Supply. In 2006, the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shareholder or by other way or any other interest in the said property and the company has all rights and authority for managing the said property by all way and by giving such trust and assurance, the company has executed this sale deed. And even if, in future, any one claims right on the property, then risk thereof stands on the company and that is if due to such right or chapter if any loss or expenses occurred by you or your heirs, that is to be repaid by the company. [...] (9) All taxes, land revenue, education cess, and other outgoings related to the said property and outstanding dues upto date has been paid and if any dues remains to be paid that is to be paid by the company. Now onwards, the responsibility for payment of all taxes, etc. related to the said property will be on the first party. By support of this deed the purchaser can enter its name on said property in Government, Semi-Government and local records, City Survey Records and Municipal Records and for that we have to give our signature, consent, and such signed consent admitted being considered. (emphasis supplied) 282. To decide this issue, the question that arises before us is whether SICA is speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct provides that the provisions of the said Act will have overriding effect notwithstanding anything contained in any other law for the time being in force. It therefore becomes evident that both SICA and 2003 Act are special laws in their respective field. 285. In LIC v. D.J. Bahadur (1981) 1 SCC 315, this Court was confronted with the question as to whether the LIC Act is a special legislation or a general legislation with respect to the Industrial Disputes Act, 1947. Justice v. R. Krishna Iyer (supra) held that in determining whether a particular statute is general or special, the focus has to be on the principal subject matter and the particular perspective. On the basis of the observation that a legislation may be general for some purposes and special for other purposes it was held that the Industrial Disputes Act, 1947 being a special law, prevails over the LIC Act. It was held: 52. In determining whether a statute is a special or a general one, the focus must be on the principal subject-matter plus the particular perspective. For certain purposes, an Act may be general and for certain other purposes it may be special and we cannot blur distinctions when dealing with fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The principal subject matter of SICA is to provide ameliorative measures for reconstruction of sick companies, while the purpose of the 2003 Act is development of the electricity industry. Thus, the purpose of the two enactments is entirely different. The 2003 Act is a later enactment, and Section 175 specifically provides that the provisions of the Act are in addition and not in derogation of any other law for the time being in force, including the SICA. 288. In KSL Industries Ltd. v. Arihant Threads Ltd. (2015) 1 SCC 166, a three-judge Bench of this Court was called upon to decide which enactment between the SICA and Recovery of Debts Due to Banks and Financial Institutions Act, 1993 RDDB Act would prevail over the other. The Court observed that although both the legislations are special laws in relation to their respective subject matters, SICA would prevail over the RDDB Act by virtue of the incorporation of a non-derogation Clause in the latter. In the RDDB Act, Parliament had specifically provided that the RDDB Act shall be in addition to and not in derogation of other laws mentioned therein including SICA: 49. The term not in derogation clearly expresses the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated to clear the arrears of electricity pertaining to the said premises. The Appellant could only recover dues from NCSML, since it was a going concern at the time when the Respondent applied for supply of electricity. It is admittedly the case that the Appellant did not institute any proceeding for recovery of dues from NCSML. This has been observed in the judgment dated 14 June 2010 of the High Court: Under these circumstances, no recovery was made by Respondent against NCSML. If no recovery were made against NCSML, the demand of dues against the Petitioner (Respondent herein) which is the purchaser of portion of land owners by NCSML is not sustainable. 292. The High Court has rightly observed that the Appellant cannot selectively withhold electricity to the Respondent under the guise of demand for past electricity arrears. The stance of the Appellant is opposed to the rehabilitation scheme framed by the BIFR. The Revised Rehabilitation Scheme formulated by the BIFR will be binding on the Appellant by virtue of Section 18(8) of SICA. According to the said provision, once a scheme is sanctioned, it shall not only bind the sick industrial company and the transferee company, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of JMIPL for a consideration of Rs. 5.5 crores. 296. On 23 May 2005, the Appellant served a notice on JMIPL demanding payment of Rs. 2.3 crores. On 05 September 2006, a Single Judge allowed the petition which was instituted by JMIPL by holding that the claim of the Appellant for arrears of electricity dues, being in the nature of a money claim, was required to be lodged within 3 years, and was barred by limitation. The appeal was dismissed by the Division Bench by a judgment dated 04 April 2014 on the ground that the appropriate remedy available to the Appellant was to file a civil suit or get a garnishee order so that the purchaser would know that there is a liability on the property in question. On 16 December 2016, the High Court dismissed the review petition preferred by the Appellant on the ground of delay. 297. The Respondents purchased a small residential house from JMIPL in 2012. On 4 October 2014, the Respondents applied for the grant of an electricity connection. Since the request was not acceded to, the Respondent instituted a complaint before the Consumer Grievances Redressal Forum seeking a connection without insistence on the dues of the earlier owner as they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein. 300. On 28 December 2006, the Respondent-purchaser applied for a new connection for the premises. However, the Appellant called upon the Respondent to clear the outstanding dues of the premises. In 2007, the Respondent filed a writ petition before the High Court of Gujarat praying for new connection without payment of the arrears. In 2010, the High Court allowed the petition and directed the Licensee to provide the connection. On 3 December 2012, the Division Bench of the High Court held that the Clause 4.1.11 of the Gujarat Electricity Supply Code, as amended in 2010, is ultra vires the provisions of the 2003 Act. 301. The Appellant has referred to Clauses 4.1.16, 4.8.1, and 4.8.4 of the Electricity Supply Code to argue that the auction-purchaser cannot deny knowledge of the requirement to clear the outstanding dues of the premises. In response, the auction-purchaser has submitted that there was no statutory provision at the relevant time requiring the payment of the dues of the previous owner from the subsequent owner as a condition precedent for providing for a fresh connection. 302. The relevant Clauses 4.1.16, 4.8.1, and 4.8.4 of the 2005 Electricity Supply Code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty has changed or been transferred. In case of a transfer, the Clause provides that arrears of every description shall be paid in full together with the transfer fee. However, the said provision only applies in situations where there has been a transfer of a service connection. In the facts of the present case, we are dealing with a situation where the auction-purchaser applied for a new connection of electricity to the premises. Therefore, Clause 4.8.1 will not be applicable to the facts of the present case. 305. Clause 4.8.4 provides that a transferee of premises would be liable for the unpaid dues of energy bills of the defaulter transferor only if they continue to use the service connection in the previous name without transferring to their name. The said Clause is only applicable where a transferee applies for a transfer of connection, and not where a transferee applies for a new power connection in their own name. 306. In the present matter, from the perusal of facts, it is evident that the Respondent applied for a fresh electricity connection for the premises on 28 December 2006. Therefore, on the date of the submission of the application for electricity by the Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a money suit before the District Judge against the previous owner, which was decreed in its favour for Rs. 2.07 crore on 24 February 1997. On account of the liabilities due to UCO Bank, a warrant of attachment was levied on 30 June 2004. 310. In 2002, UCO Bank preferred an application against the previous owner before the Debt Recovery Tribunal. On 16 March 2007, the Recovery Officer of the Debt Recovery Tribunal, Guwahati issued an auction sale notice for the land in question. Clause 7 of the notice of auction sale stipulated that the properties were being sold on as is where is basis and subject to other conditions prescribed in the Second Schedule of the Income Tax Act, 1961 and Rules made thereunder. The Appellant was the highest bidder and was declared as an auction-purchaser on 20 February 2008. On 24 March 2008, a sale certificate was issued in favour of the Appellant and possession was handed over to the Appellant by UCO Bank on 27 March 2008. The Recovery Officer confirmed the auction sale in favor of the Appellant, who took over the possession of the property on 27 March 2008. On 21 January 2009, the Appellant applied for a high-tension industries electricity connect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for permission of transfer. All prospective buyers or lessee are hereby requested to satisfy themselves regarding clearance of electricity dues before taking over the possession of such premises. In the event of non discharge of liabilities of electricity dues by the previous owner, the purchaser/ lessee will be liable to clear the said dues before power supply provided to them in accordance with provision of Terms and Condition Regulation notified by Assam Electricity Regulatory Commission. 314. Therefore, it has been contended by the Respondent that the Appellants were put to sufficient notice regarding the requirement of clearing dues before purchasing the property. In the present proceedings, the validity of the auction sale of the premises to the Appellant does not arise for consideration, as it is a matter to be decided in separate proceedings. We are only concerned with whether the Appellant, being a new owner of the premises, is liable to clear the dues of the previous consumer before getting a supply of electricity. 315. By the impugned judgment dated 2 June 2010, the High Court has upheld the validity of Regulation 3.6.4 of the AERC Electricity Supply Code. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arge. 317. Under Regulation 3.4.2 of the WB Electricity Supply Code, the licensee is entitled to recover the outstanding dues of the previous owner from the new and subsequent owner if there is a nexus between the previous owner and the new consumer. Regulation 4.6.1 provides that there shall be a deemed termination of agreement if the power supply to any consumer remains disconnected for a continuous period of 180 days. Regulation 4.6.4 overrides other provisions of the WB Electricity Supply Code as it contains a non-obstante clause. Under Regulation 4.6.4, a new consumer can be given a service connection only if the outstanding dues against the same premises is cleared along with late payment surcharge. Item 101.18: Damodar Valley Corporation v. Sree Ramdoot Rollers Private; SLP (C) No. 15723 of 2020 318. On 30 June 2012, the Appellant electricity utility, Damodar Valley Corporation, and Capricorn Ispat Udyog Private Limited, the previous owner, entered into an agreement for supply of electrical energy. The bank guarantees furnished by the Respondent expired on 4 June 2014. The electricity connection to the previous owner was disconnected on 21 September 2016 for default ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises. The Respondent again approached the High Court seeking a direction for the supply of electricity to their premises. On 19 June 2019, the Single Judge of the High Court allowed the Writ Petition and directed the grant of an electricity connection to the Respondent. The Division Bench by a judgment dated 24 April 2020 dismissed the writ appeal and upheld the decision of the Single Judge. 320. In the impugned judgment dated 24 April 2020, the High Court's interpretation largely focused on the phrase any consumer contained in Regulation 4.6.4. Under Regulation 4.6.4, a new consumer can be given service connection only if the outstanding dues against the same premises are cleared along with a late payment surcharge. The Court referred to Isha Marbles (supra) to hold that the definition of consumer contained in Section 2(15) does not include an auction-purchaser. However, the Court held that it is possible to bring an auction-purchaser within the ambit of Regulation 4.6.4 if: (i) the distribution licensee establishes the fact that the premises concerned were connected to the works of the distribution licensee; (ii) for the purpose of receiving electricity; and (iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... render complete justice. Where appropriate, this Court has to take recourse to its constitutional power Under Article 142 to bring about substantial justice. 325. Since the decision of this Court in Isha Marbles (supra), the law as regards the liability of the subsequent owner for the payment of arrears of the electricity dues of the previous owner has been in flux. Petitions challenging the decisions of different Electric Utilities were filed as early as 2001. The orders of the High Courts had the effect of either directing the Electric Utilities to grant electricity connections to auction purchasers without insisting on payment of outstanding electricity dues, or directing the auction purchasers to comply with the conditions of supply or Electricity Supply Code, as the case may be. In some of the nineteen cases, this Court while granting leave passed interim orders. The legal issue of whether electricity dues constitute a charge on the property so far as the transferor and the transferee are concerned was referred to a larger bench by an order of this Court way back in 2006. The litigation in this batch of cases remained pending. 326. In the specific cases before us, where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lectricity was already provided. Even if the consumer is the same, but the premises are different, it will be considered as a fresh connection and not a reconnection; d. A condition of supply enacted Under Section 49 of the 1948 Act requiring the new owner of the premises to clear the electricity arrears of the previous owner as a precondition to availing electricity supply will have a statutory character; e. The scope of the regulatory powers of the State Commission Under Section 50 of the 2003 Act is wide enough to stipulate conditions for recovery of electricity arrears of previous owners from new or subsequent owners; f. The Electricity Supply Code providing for recoupment of electricity dues of a previous consumer from a new owner have a reasonable nexus with the objects of the 2003 Act; g. The Rule making power contained Under Section 181 read with Section 50 of the 2003 Act is wide enough to enable the regulatory commission to provide for a statutory charge in the absence of a provision in the plenary statute providing for creation of such a charge; h. The power to initiate recovery proceedings by filing a suit against the defaulting consumer is independent of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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