Case: Messrs Isha Marbles Vs. Bihar State Electricity Bo Ard

had not read Section 24 in conjunction with other statutory provisions though they had been not ed, namely, Section 26 of the Supply Act; Section 22 of the Electricity Act and Clause VI of Schedule of the Electricity Act. They clearly postulate the obligation to supply energy for such premises. At the risk of repetition we hold the premises had enjoyed the benefit of electricity. The owner of the premises or even the occupier of the premises, as stated under Rule 2(af) of the Indian Electricity Rules, becomes liable to pay the consumption charges together with other dues, in other words, the liability is in respect of the dues of electricity which came to be supplied pursuant to the contract with the former owner. The discharge of such Liability will be on such owner or occupier.54. From the above it is clear, t he High Court has chosen to construe Section 24 of the Electricity Act correctly. There is no charge over the property. Where that premises comes to be owned or occupied by the auction purchaser, when such purchaser seeks supply of electric energy he cannot be called upon to clear past arrears as a condition precedent to supply.What matters is the contract entered into by the erstwhile consumer with the Board. The Board cannot seek the enforcement of contractual liability against the third party. Of course, the bona fides of the sale may not be relevant.55.The form of requisition relating to the contract is in Annexure VIII prescribed under Clause VI of the Schedule to the Electricity Act. They cannot make the auction purchaser liable. In the case of Isha Marbles we have already extracted the relevant clause wherein the consumer was asked to state his willingness to clear off the arrears to which the answer was in the negative. Therefore, the High Court has rightly held that the auction purchaser, namely, "the writ petitioner before us is ready and willing to enter into a now contract that the auction purchaser does not intend to obtain the continuance of supply of electrical energy on the basis of the old agreement". It Is true that it was the same premises to which reconnection is to be given. Otherwise, with the change of every ownership new connections have to be issued does not appear to be the correct line of app roach as such a situation is brought about by the inaction of the Electricity Board in not recovering the arrears as and when they fall due or not providing itself by adequate deposits.56.This is a case of sale under Section 29 of the Corporation Act. Of course, what the Corporation seeks to recover are the loans advanced by enforcement of a mortgage. Such sale cannot affect the right of the Board to revcover the dues as and when such dues arose, is a point to be put against it.57. Turning to the instruction issued by the Chairman of the Board and a Circular dated 19.1.72 on which the High Court had relied, in our considered view, is again to be weighed against the Electricity Board.58. In view of the above, w e hold that the decision in the Souriyar Luka (supra) on which reliance is placed by Mr. Gopal Subramaniam is correct. The ruling of National Textile Corporation (M.P.) Ltd., Bhopal (supra) rested on the interpretation. of the provisions of Sick Textile Under-takings (Nationalisation) Act (57 of 1974). That is not relevant, The question with which we are concerned did not directly arise in Bihar State Electricity Board, Patna and others v. M/s. Green Rubber Industries and others 1 990 1 SCC 73 1. We do not think it is necessary for us to refer to Rant Chandra Prasad Sharma and others v. State of Vihar and another 1967 AIR(SC) 349 since that case related to co-owner.59. What we have discussed above pears to be the law gatherable from the various provisions which we have detailed out above. It is impossible to impose on the purchasers a liability which was not incurred by them.60. No doubt, from the tabulated statement above set out, the auction purchasers came to purchase the property after disconnection but they cannot be consumer or occupier within the meaning of the above provisions till a contract is entered into.61. We are clearly of the opinion that there is great reason and justice in holding as above. Electricity is public property. Law, in its majesty, behighly protects public property and behoves everyone to respect public property. But, the law, as it stands, is inadequate to enforce the liability of the previous contracting party against the auction purchaser who is a third party and is in no way connected with the previous owner/occupier. It may not be correct to state, if we hold as we have done above, it would permit dishonest consumers transferring their units from one hand to another, from time to time, infinitum without the payment of the dues to the extent of lacs and lacs of rupees and each one of them can easily say that he is not liable for the liability of the predecessor in interest. No doubt, dishonest consumers cannot be allowed to play truant with the public property but inadequacy of the law can hardly be a substitute for overzealousness. The relevant portions of the details of Directorship of Waxpol Industries and Promoters of Neo Chemical and Metal Products Pvt. Ltd. from 1. 1.83 as on date of purchase of mortgaged assets by Waxpol and thereafter (filed as Annexure D to the counter affidavit on behalf of Waxpol Industries) are extracted below:Names of promoters Names of Directors of M/s. Neo Chemicals of Waxpol Industries 1. Indu Gupta w/o 1. R.P. Gupta R.P. Gupta 2. Kusum Garg w/o 2.Parmanand Garg Parmanand Garg 3. Smt. S. Natarajan w/o 3. G. Natarajan G. Natarajan62. Factually, it appears that there is no new entity. Hence, in this case M/s Neo Chemical and Metal Products Pvt. Ltd. would be liable for the past arrears.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]47. It is important to note that though the purchaser asked for electricity connection as a new connection it cannot be regarded as a new connection. It is only a reconnection since the premises had already been supplied with electrical energy. Such a supply had been disconnected owing to the default of the consumer. That consumer had bound himself to the Board to pay the dues. He also agreed to abide by the condition as stipulated in the Act and the Rules including the payment of dues.48. Under Section 79 Clause (i) read with Section of the Supply Act it is open to the Board to make Regulations to stipulate the terms and. conditions of supply of electrical energy. One such stipulation is that the consumption charges must be paid.In all the present cases the supply of electricity to a particular premises which had the benefit of enjoying electricity had been disconnected under Section 24 of the Electricity Act. The auction purchasers want reconnection. The Board says no; unless and until the consumption charges in relation to that property which came to be incurred during the ownership of the previous incumbent are cleared off.n all the present cases the supply of electricity to a particular premises which had the benefit of enjoying electricity had been disconnected under Section 24 of the Electricity Act. The auction purchasers want reconnection. The Board says no; unless and until the consumption charges in relation to that property which came to be incurred during the ownership of the previous incumbent are clearedHigh Court, in the main judgment in Suman Packaging (C.W.J.C. No. 5358 of 1972) gives the following reasons for answering the question against the Board:1.Sect ion 24 stipulates discontinuance of supply of electrical energy to the consumer in respect of a sum due from him. We are afraid the High Court had not read Section 24 in conjunction with other statutory provisions though they had been not ed, namely, Section 26 of the Supply Act; Section 22 of the Electricity Act and Clause VI of Schedule of the Electricity Act. They clearly postulate the obligation to supply energy for such premises. At the risk of repetition we hold the premises had enjoyed the benefit of electricity. The owner of the premises or even the occupier of the premises, as stated under Rule 2(af) of the Indian Electricity Rules, becomes liable to pay the consumption charges together with other dues, in other words, the liability is in respect of the dues of electricity which came to be supplied pursuant to the contract with the former owner. The discharge of such Liability will be on such owner or occupier.54. From the above it is clear, t he High Court has chosen to construe Section 24 of the Electricity Act correctly. There is no charge over the property. Where that premises comes to be owned or occupied by the auction purchaser, when such purchaser seeks supply of electric energy he cannot be called upon to clear past arrears as a condition precedent to supply.What matters is the contract entered into by the erstwhile consumer with the Board. The Board cannot seek the enforcement of contractual liability against the third party. Of course, the bona fides of the sale may not be relevant.55.The form of requisition relating to the contract is in Annexure VIII prescribed under Clause VI of the Schedule to the Electricity Act. They cannot make the auction purchaser liable. In the case of Isha Marbles we have already extracted the relevant clause wherein the consumer was asked to state his willingness to clear off the arrears to which the answer was in the negative. Therefore, the High Court has rightly held that the auction purchaser, namely, "the writ petitioner before us is ready and willing to enter into a now contract that the auction purchaser does not intend to obtain the continuance of supply of electrical energy on the basis of the old agreement". It Is true that it was the same premises to which reconnection is to be given. Otherwise, with the change of every ownership new connections have to be issued does not appear to be the correct line of app roach as such a situation is brought about by the inaction of the Electricity Board in not recovering the arrears as and when they fall due or not providing itself by adequate deposits.56.This is a case of sale under Section 29 of the Corporation Act. Of course, what the Corporation seeks to recover are the loans advanced by enforcement of a mortgage. Such sale cannot affect the right of the Board to revcover the dues as and when such dues arose, is a point to be put against it.57. Turning to the instruction issued by the Chairman of the Board and a Circular dated 19.1.72 on which the High Court had relied, in our considered view, is again to be weighed against the Electricity Board.58. In view of the above, w e hold that the decision in the Souriyar Luka (supra) on which reliance is placed by Mr. Gopal Subramaniam is correct. The ruling of National Textile Corporation (M.P.) Ltd., Bhopal (supra) rested on the interpretation. of the provisions of Sick Textile Under-takings (Nationalisation) Act (57 of 1974). That is not relevant, The question with which we are concerned did not directly arise in Bihar State Electricity Board, Patna and others v. M/s. Green Rubber Industries and others 1 990 1 SCC 73 1. We do not think it is necessary for us to refer to Rant Chandra Prasad Sharma and others v. State of Vihar and another 1967 AIR(SC) 349 since that case related to co-owner.59. What we have discussed above pears to be the law gatherable from the various provisions which we have detailed out above. It is impossible to impose on the purchasers a liability which was not incurred by them.60. No doubt, from the tabulated statement above set out, the auction purchasers came to purchase the property after disconnection but they cannot be consumer or occupier within the meaning of the above provisions till a contract is entered into.61. We are clearly of the opinion that there is great reason and justice in holding as above. Electricity is public property. Law, in its majesty, behighly protects public property and behoves everyone to respect public property. But, the law, as it stands, is inadequate to enforce the liability of the previous contracting party against the auction purchaser who is a third party and is in no way connected with the previous owner/occupier. It may not be correct to state, if we hold as we have done above, it would permit dishonest consumers transferring their units from one hand to another, from time to time, infinitum without the payment of the dues to the extent of lacs and lacs of rupees and each one of them can easily say that he is not liable for the liability of the predecessor in interest. No doubt, dishonest consumers cannot be allowed to play truant with the public property but inadequacy of the law can hardly be a substitute for overzealousness. The relevant portions of the details of Directorship of Waxpol Industries and Promoters of Neo Chemical and Metal Products Pvt. Ltd. from 1. 1.83 as on date of purchase of mortgaged assets by Waxpol and thereafter (filed as Annexure D to the counter affidavit on behalf of Waxpol Industries) are extracted below:Names of promoters Names of Directors of M/s. Neo Chemicals of Waxpol Industries 1. Indu Gupta w/o 1. R.P. Gupta R.P. Gupta 2. Kusum Garg w/o 2.Parmanand Garg Parmanand Garg 3. Smt. S. Natarajan w/o 3. G. Natarajan G. Natarajan62. Factually, it appears that there is no new entity. Hence, in this case M/s Neo Chemical and Metal Products Pvt. Ltd. would be liable for the past arrears.