IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No.6380 of 2009 Date of Decision: 13.08.2009 M/s T.H. Estate Private Limited and another Petitioners Versus Punjab State Electricity Board and others Respondents CORAM:- HON'BLE MR. JUSTICE JASBIR SINGH Present: Mr.Anand Chhibbar, Advocate for the petitioners Mr.S.P.Soi, Advocate Mr.Aman Chaudhary, Advocate for respondent No.4 ….. Jasbir Singh, J. Petitioners have filed this writ petition with a prayer to quash letter/ memo No.421 dated 24.3.2009 (P4), vide which, demand has been raised from petitioner No.2, by respondent No.3 for a sum of Rs.4,16,330/- as charges towards use of electricity by respondent No.4. It is an admitted fact that respondent No.4 went in liquidation and vide order dated 12.1.2006, this Court granted permission to the official liquidator to sell all the moveable and immoveable assets of respondent No.4, after giving publication in the newspaper. Sale was ordered to be conducted in association with the secured creditors. Property was sold to one Ms/ Cheema Boiler, however, before confirmation, in an inter-se bidding between M/s Cheema Boiler and petitioner No.1, petitioner No.1 being the highest bidder, the property was sold to it for a sum of Rs.3.55 Civil Writ Petition No.6380 of 2009 crores vide order dated 26.7.2007. Thereafter, petitioner No.1 sold the property, in question to petitioner No.2, who, then submitted an application with respondent No.3 for grant of an electric connection, which was refused on the ground that respondent No.4, the previous owner was in default of Rs.4,16,330/- for use of electricity. Petitioner No.2 served a legal notice, stating that the property was purchased in an auction and it was not subject to any encumbrance on that property. Even then the electric connection was not released. Hence, this writ petition. On 28.4.2009, when notice of motion was issued, this Court noted the following contention of counsel for the petitioners:- “Learned counsel relies on M/s Isha Marbles vs. Bihar Electricity Board & another, JT 1995 (2) SC 626 to contend that the respondent-Board cannot enforce contractual liability of original defaulter against a third party, who has purchased the property in auction. Learned counsel further contends that the Company has gone in liquidation. The petitioner is the purchaser of the property. Learned counsel has clarified that there was no condition for purchase, imposed on the petitioner to the effect that the petitioner would be required to clear the dues of the Punjab State Electricity Board. Learned counsel has also relied on Annexure P-6.” After notice, reply has been filed by respondent No.1 to 3. Averments made by the petitioners have been controverted by stating that electric connection can be issued in the defaulting premises, only on payment of the defaulted amount. It was further stated that temporary 2 Civil Writ Petition No.6380 of 2009 connection has already been released, however, the same will be converted into permanent, only after receipt of amount, as mentioned in earlier part of this order. Counsel for the parties heard. This Court feels that in view of admitted facts, as mentioned above, this writ petition is bound to succeed. It is established on record that the property, in dispute, was sold free from all encumbrances. Regarding the amount claimed, default was committed by respondent No.4, which went in liquidation and thereafter, its properties were sold under orders of this Court. Petitioner No.1 being the highest bidder, purchased that property. Controversy in this case is squarely covered by ratio of the judgment of the Hon’ble Supreme Court in Isha Marbles v. Bihar State Electricity Board and another, JT 1995 (2) S.C. 626, wherein it was held that an auction purchaser is under no duty to discharge liability of the previous owner, regarding payment of electricity charges. In this case also, property was sold in favour of the petitioners without any encumbrance. To the same effect is the ratio of another judgment of the Hon’ble Supreme Court in AI Champdany Industries Ltd. V. Official Liquidator and another, (2009) 148 Comp Cas 641 (SC). In the above said judgment, it was held that when property of a Company in liquidation is sold free from any encumbrance, then the purchaser is under no duty to pay amount of property tax to the municipal authorities which relates to the period prior to the date of confirmation of sale in favour of the subsequent purchaser. 3 Civil Writ Petition No.6380 of 2009 To the same effect is the ratio of a Division Bench judgment of this Court in Ambika International Ltd. V. Dakshin Haryana Bijli Vitran Nigam Limited and others (CWP No.858 of 2005), decided on 27.1.2005. In view of above, this writ petition is allowed, the impugned demand letter dated 24.3.2009 (P4) is quashed and directions are issued to respondent No.3 to release permanent electric connection in favour of petitioner No.2, however, it is made clear that respondent No.3 will be at liberty to claim amount, in dispute, from respondent No.4 or may be, from the official liquidator, as per law. No order as to costs. 13.08.2009 (Jasbir Singh) gk Judge 4