Carbon Resources Pvt. Ltd Vs. the Assam Electricity Regulatory Commission. - Court Judgment

Excerpt:
[mohan shantanagoudar j.] this writ petition is filed under articles 226 & 227 of the constitution of india praying to direct the respondents not to insist upon the petitioner to obtain license for the play of dart game, chess, rummy, snooker and carom, either under the karnataka police act or under the licensing and controlling of the place of public amusement order. bangalore city, 1989, as the above said games are declared as a game of skill by this hon'ble court.1. heard mr. g. n. sahewall, learned counsel appearing for the petitioner. mr. b. d. das, learned senior standing counsel of the assam state electricity board represents the respondents 1 to 5. 2. the petitioner who purchased an immovable property through an auction sale conducted by the recovery officer, debt recovery tribunal, guwahati (hereinafter referred to as the drt), challenges the vires of clause 3. 6. 4 of the assam electricity regulatory commission (electrity, supply code and related matters) regulations, 2004 (hereinafter referred to as "the regulations, 2004"), where under the person occupying a new property is cast with an obligation to ensure payment of outstanding electricity dues, when he makes a requisition for a fresh electricity connection in the new property. 2. 1the petitioner is also challenging the demand made by the respondents to clear the outstanding dues of the previous consumer, whose hypothecated landed property was sold by the uco bank through public auction on 20. 2. 2008. 3. the issue that needs to be answered in the instant case is whether the petitioner is an auction purchaser is obliged to clear the dues of the earlier consumer of electricity in respect of the premises purchased through auction sale, before the new occupier can be supplied electricity in respect of the purchased premises. 4. to consider the legal issue, the relevant facts may be noted at the very outset. 4. 1on 29. 12. 2007, an auction sale notice was published by the recovery officer of the drt in respect of a partial land measuring 16 bigha, 1 katha 12 lachas along with at (assam type) & rcc building/sheds etc. standing thereon besides scrapes of plant and machinery and boundary wall in the name of m/s eastern steel & alloys company ltd. , on "as is where is basis". 4. 2the petitioner being interested in the property made an offer and was the only bidder and by order dated 24. 3. 2008 of the drt sale confirmation was ordered and certificate of sale in respect of the auction property was granted in favour of the petitioner. 4. 3as a portion of the auction property was under occupation of the crpf personnel, the petitioner wrote to the uco bank authorities to remove the crpf personnel campaigning in the property and by the reply dated 27. 3. 2008 given by the chief manager of the uco bank, guwahati the auction purchaser were informed that the bank will take responsibility for de-campaigning the crpf personnel who were campaigning in the auction property. 4. 4on 21. 1. 2009 the petitioner informed the manager, bongaigaon sub- division, lower assam electricity distribution company ltd. (respondent no. 4) [annexure-vii] about the auction purchase of the hypothecated property and requested for sanctioning of 50 to 150 kva electricity connection to enable them to set up a calcined petroleum coke industry. 4. 5in the mean time the petitioner learnt that new connection cannot be given to the auction property as some old dues are pending in respect of the said property and accordingly requested for intervention of the chairman for early release of the electricity connection. 4. 6by the impugned communication dated 27. 6. 2009 the sr. manager of the bongaigaon electrical sub-division (respondent no. 5) informed that the total dues of the old consumer for connection in the hypothecated property with principal and additional surcharge was rs. 4,57,23,633. 81. 4. 7as the respondents were not prepared to give a fresh connection without clearance of the outstanding dues of the old consumers, the present petition came to be filed. 5. the petitioner refers to the provisions of the electricity act, 2003 (hereinafter referred to as "the 2003 act") and more particularly section 43 thereof to submit that the respondents are obliged to give supply of electricity within 1 month after receipt of a request from the owner or occupier of any premises and there cannot be any exception for this obligation cast on the supplier. 5. 1section 50 of the 2003 act is also refers to by the learned counsel which provides for an electricity supply code for recovery of electricity charges under which the regulations, 2004 have been framed. chapter-(iii) of the regulations 2004 pertains to new power supply. under clause 3. 6. 4 an obligation is cast on a person occupying a new property where power supply has been disconnected, to ascertain immediately before his occupation the amount due and to ensure that all outstanding electricity dues are duly paid up subject to limitations under section 56(2) of the act. 5. 2section 56 pertains to the power to cut off supply of electricity for default of due payment. however sub-section (2) of section 56 provides that no sum due from any consumer will be recoverable after the period of 2 years from the due date, unless the amount is continuously shown as recoverable arrear for electricity supplied. 6. it is submitted on behalf of the petitioner that the hypothecated property has been sold by the uco bank by following the procedures prescribed by the recovery of debts due to banks and financial institutions act, 1993 (hereinafter referred to as the recovery act) and if any outstanding dues of an old consumer remains to be recovered, the respondents could have approached the drt under section 330 of the debt recovery act. 7. referring to the provisions of section 55 of the transfer of property act, 1882 (hereinafter referred to as the tp act), the petitioner contends that it is the responsibility of the seller to pay all public charges in respect of the property upto the date of sale and the interest on all encumbrances on such property and accordingly it is contended by the petitioner that burden cast on the seller should not be passed on to the bona fide auction purchaser. 8. in support of the contentions raised, the petitioner relies upon the supreme court decision in isha marbles v. bihar state electricity board reported in (1995) 2 scc 648 where the supreme court while examining the liability of the auction purchaser to meet the liability of old consumer of electricity to the premises purchased in the auction sale have held that the auction purchaser cannot be called upon to clear the past arrears as a condition precedent for supply as they are not "consumer or occupier" and the law as it stands is inadequate to pass on the liability of the previous consumer to the auction purchaser. 8. 1in isha marbles (supra) the supreme court was examining the provisions of the indian electricity act, 1910 and not the 2003 act and there is no regulations, 2004 nor any provisions like section 50 given under the 2003 act, to enable the board to recover the arrear dues of an old consumer. 9. in the second case i. e. ahmedabad electricity co. ltd. v. gujarat inns pvt. ltd. reported in (2004) 3 scc 587, where a similar view was taken by the supreme court to the effect that an auction purchaser cannot be held liable to clear the arrears incurred by previous owner in respect of power supply, the supreme court once again was examining the issue under the indian electricity act, 1910 and not the 2003 act, under which provisions for making regulations for recovery of the dues of the earlier consumer has been made. 10. contending that dues sought to be recovered from the auction purchaser are only contractual dues and not debt due to the stake or the keen. there can be no basis for considering the said dues to be a priority debt, which ought to be discharged by auction purchaser, before he can receive supply of electricity in the purchased premises. 11. we may also usefully refer to the recent decision of the supreme court in hariyana financial corporation vs. rajesh gupta reported in (2010)1 scc 655, where in respect of certain grievances of the auction purchaser who purchased a hypothecated property put on sale by the hariyana financial corporation (hfc), have held that the hfc not having disclosed to the intending purchaser that there was no independent passage leading to the property, merely on the basis of the condition that property is being sold on "as is where is basis", the hfc cannot be held back earnest money as intending purchaser was provided misleading information. 12. we may also usefully refer to the supreme court decision in ut chandigarh administration vs. amerjeet singh reported in (2009) 4 scc 660, where the supreme court was examining the right of an auction purchaser to purchase property through auction on "as is where is basis". in this case the supreme court interfered with the relief granted by the consumer forum to the auction purchaser in respect of the deficiencies of amenities complained of by the purchaser on the ground that it was open for an intending purchaser in public auction to participate and to make offer and having purchased a property through auction, the purchaser cannot be hard to say that the property suffered from certain disadvantages. 13. as regards applicability of section 56(2) of the 2003 act which prohibits recovery of a sum due from any consumer after a period of 2 years from the due date, which can be easily seen that the electricity board proceeded to recovery the amount due from the old consumer by instituting a suit i. e. money suit 3/95 in the court of district judge, bongaigaon. the suit was decreed on 24. 2. 1997. in the money execution case no. 5/1997 instituted by the respondents, the district court permitted the decree holder to take into possession the transformers standing on the premises. 13. 1therefore the recovery proceeding initiated through money suit 3/95 cannot be understood to be a proceeding under section 56(2) of the 2003 act and under such circumstances, there cannot be any basis for holding that the action of the respondents in seeking recovery of the amount is not sustainable because of the bar placed by section 56(2) of the act. 14. it may also be noted that even before notice of auction of property was published in the newspaper on 29. 12. 2007, at the instance of the respondent authorities, the revenue authorities in the state were intimated by the government through the circular dated 29. 11. 2004 of the general administration (b) department that sale permission in respect of land and building (premises) ought not to be granted without clearing the outstanding arrear dues to the aseb. the public notice was also issued on 26. 6. 2006 by the respondents giving intimation to all prospective buyers to satisfy themselves of clearance of electricity dues before taking over possession of any premises, where there are outstanding liabilities of the previous consumer as the purchaser will be liable to clear the earlier dues of the old consumer before power supply can be provided to them. these notifications have obviously been issued for information of the public in pursuant to clause 3. 6. 4 of the regulations, 2004 and the auction purchaser cannot be said to uninformed about this obligation to pay the arrear dues of the old consumer in respect of electricity supply in the purchased property. 14. 1as regards the contention made that the respondents could have approached the tribunal if they were aggrieved by the selling of the hypothecated property by the recovery officer without realization of the electricity dues in respect of the previous occupier, a reading of the said provisions shows that the recourse to section 30 can be taken by a person aggrieved within 30 days from the date on which a copy of the order is issued to him. in the present case we do not find that the respondents have been notified formally of the order passed by the recovery officer and under such circumstances we cannot held the respondents had any remedy under the provisions of the recovery act to release the arrear dues of the old consumer.

Judgment:
1. Heard Mr. G. N. Sahewall, learned counsel appearing for the petitioner. Mr. B. D. Das, learned Senior Standing Counsel of the Assam State Electricity Board represents the respondents 1 to 5.

2. The petitioner who purchased an immovable property through an auction sale conducted by the Recovery Officer, Debt Recovery Tribunal, Guwahati (hereinafter referred to as the DRT), challenges the vires of Clause 3. 6. 4 of the Assam Electricity Regulatory Commission (Electrity, Supply Code and Related Matters) Regulations, 2004 (hereinafter referred to as "the Regulations, 2004"), where under the person occupying a new property is cast with an obligation to ensure payment of outstanding electricity dues, when he makes a requisition for a fresh electricity connection in the new property.

2. 1The petitioner is also challenging the demand made by the respondents to clear the outstanding dues of the previous consumer, whose hypothecated landed property was sold by the UCO Bank through public auction on 20. 2. 2008.

3. The issue that needs to be answered in the instant case is whether the petitioner is an auction purchaser is obliged to clear the dues of the earlier consumer of electricity in respect of the premises purchased through auction sale, before the new occupier can be supplied electricity in respect of the purchased premises.

4. To consider the legal issue, the relevant facts may be noted at the very outset.

4. 1On 29. 12. 2007, an Auction Sale Notice was published by the Recovery Officer of the DRT in respect of a partial land measuring 16 Bigha, 1 Katha 12 Lachas along with AT (Assam Type) & RCC Building/Sheds etc. standing thereon besides scrapes of plant and machinery and boundary wall in the name of M/s Eastern Steel & Alloys Company Ltd. , on "As is where is basis".

4. 2The petitioner being interested in the property made an offer and was the only bidder and by order dated 24. 3. 2008 of the DRT sale confirmation was ordered and Certificate of Sale in respect of the auction property was granted in favour of the petitioner.

4. 3As a portion of the auction property was under occupation of the CRPF personnel, the petitioner wrote to the UCO Bank Authorities to remove the CRPF personnel campaigning in the property and by the reply dated 27. 3. 2008 given by the Chief Manager of the UCO Bank, Guwahati the auction purchaser were informed that the Bank will take responsibility for de-campaigning the CRPF personnel who were campaigning in the auction property.

4. 4On 21. 1. 2009 the petitioner informed the Manager, Bongaigaon Sub- Division, Lower Assam Electricity Distribution Company Ltd. (respondent No. 4) [Annexure-VII] about the auction purchase of the hypothecated property and requested for sanctioning of 50 to 150 KVA Electricity Connection to enable them to set up a Calcined Petroleum Coke Industry.

4. 5In the mean time the petitioner learnt that new connection cannot be given to the auction property as some old dues are pending in respect of the said property and accordingly requested for intervention of the Chairman for early release of the electricity connection.

4. 6By the impugned communication dated 27. 6. 2009 the Sr. Manager of the Bongaigaon Electrical Sub-Division (respondent No. 5) informed that the total dues of the old consumer for connection in the hypothecated property with principal and additional surcharge was Rs. 4,57,23,633. 81.

4. 7As the respondents were not prepared to give a fresh connection without clearance of the outstanding dues of the old consumers, the present petition came to be filed.

5. The petitioner refers to the provisions of the Electricity Act, 2003 (hereinafter referred to as "the 2003 Act") and more particularly Section 43 thereof to submit that the respondents are obliged to give supply of electricity within 1 month after receipt of a request from the owner or occupier of any premises and there cannot be any exception for this obligation cast on the supplier.

5. 1Section 50 of the 2003 Act is also refers to by the learned counsel which provides for an Electricity Supply Code for recovery of electricity charges under which the Regulations, 2004 have been framed. Chapter-(iii) of the Regulations 2004 pertains to new power supply. Under Clause 3. 6. 4 an obligation is cast on a person occupying a new property where power supply has been disconnected, to ascertain immediately before his occupation the amount due and to ensure that all outstanding electricity dues are duly paid up subject to limitations under Section 56(2) of the Act.

5. 2Section 56 pertains to the power to cut off supply of electricity for default of due payment. However Sub-Section (2) of Section 56 provides that no sum due from any consumer will be recoverable after the period of 2 years from the due date, unless the amount is continuously shown as recoverable arrear for electricity supplied.

6. It is submitted on behalf of the petitioner that the hypothecated property has been sold by the UCO Bank by following the procedures prescribed by the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the Recovery Act) and if any outstanding dues of an old consumer remains to be recovered, the respondents could have approached the DRT under Section 330 of the Debt Recovery Act.

7. Referring to the provisions of Section 55 of the Transfer of Property Act, 1882 (hereinafter referred to as the TP Act), the petitioner contends that it is the responsibility of the seller to pay all public charges in respect of the property upto the date of sale and the interest on all encumbrances on such property and accordingly it is contended by the petitioner that burden cast on the seller should not be passed on to the bona fide auction purchaser.

8. In support of the contentions raised, the petitioner relies upon the Supreme Court decision in Isha Marbles v. Bihar State Electricity Board reported in (1995) 2 SCC 648 where the Supreme Court while examining the liability of the auction purchaser to meet the liability of old consumer of electricity to the premises purchased in the auction sale have held that the auction purchaser cannot be called upon to clear the past arrears as a condition precedent for supply as they are not "Consumer or Occupier" and the law as it stands is inadequate to pass on the liability of the previous consumer to the auction purchaser.

8. 1In Isha Marbles (Supra) the Supreme Court was examining the provisions of the Indian Electricity Act, 1910 and not the 2003 Act and there is no Regulations, 2004 nor any provisions like Section 50 given under the 2003 Act, to enable the Board to recover the arrear dues of an old consumer.

9. In the second case i. e. Ahmedabad Electricity Co. Ltd. v. Gujarat Inns Pvt. Ltd. reported in (2004) 3 SCC 587, where a similar view was taken by the Supreme Court to the effect that an auction purchaser cannot be held liable to clear the arrears incurred by previous owner in respect of power supply, the Supreme Court once again was examining the issue under the Indian Electricity Act, 1910 and not the 2003 Act, under which provisions for making regulations for recovery of the dues of the earlier consumer has been made.

10. Contending that dues sought to be recovered from the auction purchaser are only contractual dues and not debt due to the stake or the keen. There can be no basis for considering the said dues to be a priority debt, which ought to be discharged by auction purchaser, before he can receive supply of electricity in the purchased premises.

11. We may also usefully refer to the recent decision of the Supreme Court in Hariyana Financial Corporation vs. Rajesh Gupta reported in (2010)1 SCC 655, where in respect of certain grievances of the auction purchaser who purchased a hypothecated property put on sale by the Hariyana Financial Corporation (HFC), have held that the HFC not having disclosed to the intending purchaser that there was no independent passage leading to the property, merely on the basis of the condition that property is being sold on "As is where is basis", the HFC cannot be held back earnest money as intending purchaser was provided misleading information.

12. We may also usefully refer to the Supreme Court decision in UT Chandigarh Administration vs. Amerjeet Singh reported in (2009) 4 SCC 660, where the Supreme Court was examining the right of an auction purchaser to purchase property through auction on "As is where is basis". In this case the Supreme Court interfered with the relief granted by the Consumer Forum to the auction purchaser in respect of the deficiencies of amenities complained of by the purchaser on the ground that it was open for an intending purchaser in public auction to participate and to make offer and having purchased a property through auction, the purchaser cannot be hard to say that the property suffered from certain disadvantages.

13. As regards applicability of Section 56(2) of the 2003 Act which prohibits recovery of a sum due from any consumer after a period of 2 years from the due date, which can be easily seen that the Electricity Board proceeded to recovery the amount due from the old consumer by instituting a suit i. e. Money Suit 3/95 in the Court of District Judge, Bongaigaon. The suit was decreed on 24. 2. 1997. In the Money Execution Case No. 5/1997 instituted by the respondents, the District Court permitted the decree holder to take into possession the transformers standing on the premises.

13. 1Therefore the recovery proceeding initiated through Money Suit 3/95 cannot be understood to be a proceeding under Section 56(2) of the 2003 Act and under such circumstances, there cannot be any basis for holding that the action of the respondents in seeking recovery of the amount is not sustainable because of the bar placed by Section 56(2) of the Act.

14. It may also be noted that even before notice of auction of property was published in the newspaper on 29. 12. 2007, at the instance of the respondent authorities, the Revenue Authorities in the State were intimated by the Government through the circular dated 29. 11. 2004 of the General Administration (B) Department that sale permission in respect of land and building (premises) ought not to be granted without clearing the outstanding arrear dues to the ASEB. The public notice was also issued on 26. 6. 2006 by the respondents giving intimation to all prospective buyers to satisfy themselves of clearance of electricity dues before taking over possession of any premises, where there are outstanding liabilities of the previous consumer as the purchaser will be liable to clear the earlier dues of the old consumer before power supply can be provided to them. These notifications have obviously been issued for information of the public in pursuant to Clause 3. 6. 4 of the Regulations, 2004 and the auction purchaser cannot be said to uninformed about this obligation to pay the arrear dues of the old consumer in respect of electricity supply in the purchased property.

14. 1As regards the contention made that the respondents could have approached the Tribunal if they were aggrieved by the selling of the hypothecated property by the Recovery Officer without realization of the electricity dues in respect of the previous occupier, a reading of the said provisions shows that the recourse to Section 30 can be taken by a person aggrieved within 30 days from the date on which a copy of the order is issued to him. In the present case we do not find that the respondents have been notified formally of the order passed by the Recovery Officer and under such circumstances we cannot held the respondents had any remedy under the provisions of the Recovery Act to release the arrear dues of the old consumer.