Case: Dakshin Haryana Bijli Vitran Nigam Ltd Vs. M/S. Paramount Polymers Pvt.Ltd

in that process in respect of recovery of dues in respect of a premises to which supply had been made, a condition is inserted for its recovery from a transferee of the undertaking, it cannot ex facie be said to be unauthorized or unreasonable. Of course, still a court may be able to strike it down as being violative of the fundamental rights enshrined in the Constitution of India. But that is a different matter. In this case, the High Court has not undertaken that exercise. 14. The position obtaining in Isha Marbles, [(1995) 1 S.C.R. 847]. (supra) was akin to the position that was available in the case on hand in view of the Haryana Government Electrical Undertakings (Dues Recovery) Act, 1970. There was no insertion of a clause like clause 21A as in the present case, in the Terms and Conditions of Supply involved in that case. The decision proceeded on the basis that the contract for supply was only with the previous consumer and the obligation or liability was enforceable only against that consumer and since there was no contractual relationship with the subsequent purchaser and he was not a consumer within the meaning of the Electricity Act, the dues of the previous consumer could not be recovered from the purchaser. This Court had no occasion to consider the effect of clause like clause 21A in the Terms and Conditions of Supply. We are therefore of the view that the decision in Isha Marbles,[(1995) 1 S.C.R. 847]. (supra) cannot be applied to strike down the condition imposed and the first respondent has to make out a case independent on the ratio of Isha Marbles, [(1995) 1 S.C.R. 847]. (supra), though it can rely on its ratio if it is helpful, for attacking the insertion of such a condition for supply of electrical energy. This Court was essentially dealing with the construction of Section 24 of the Electricity Act in arriving at its conclusion. The question of correctness or otherwise of the decision in Isha Marbles, [(1995) 1 S.C.R. 847]. (supra) therefore does not arise in this case especially in view of the fact that the High Court has not considered the question whether clause 21A of the terms and conditions incorporated is invalid for any reason.15. In the light of what we have stated above we think that the proper course to adopt is to set aside the judgments of the learned Single Judge and that of the Division Bench and remit the writ petition filed by the first respondent to the High Court for a fresh decision in accordance with law. The first respondent would be free to amend its writ petition including the prayers therein and in the case of such an amendment the appellant would be entitled to file an additional statement in opposition. The writ petition will be considered afresh by the High Court in the light of what we have stated above.16. It is seen that after the High Court allowed the writ petition, the connection was restored to the first respondent in obedience to the writ, even though subsequently, this Court stayed the operation of the judgment of the High Court by its order dated 5.7.2006. It is now brought to our notice that a fresh connection has been provided to the first respondent in the light of the direction in the judgment under appeal without collecting the arrears that were due from M/s L.L.C. Steel Pvt. Ltd. Strictly, in view of the fact that we have set aside the judgment of the High Court, the first respondent should lose the benefit of the fresh connection. But considering that the first respondent is an industrial undertaking and taking note of the plea that investments have been made by it to make the unit workable, we think that it will be appropriate to direct the first respondent to deposit a portion of the amount in arrears as a condition for continuance of the supply to it by the appellant on payment of regular monthly bills as per the terms and conditions between the parties. We, therefore, direct that if the first respondent pays to the appellant, without prejudice to its contentions in the writ petition, a sum of Rs.25 lakhs (rupees twenty five lakhs) within a period of six weeks from today, the fresh connection given to the first respondent will not be disconnected by the appellant, until the writ petition is disposed of afresh by the High Court pursuant to this order of remand. In case the High Court accepts the challenge of the first respondent to clause 21A as inserted in the terms and conditions of supply, the appellant will refund the sum of Rs.25 lakhs with six per cent interest thereon from the date of payment by the first respondent till the date of its return by the appellant. In case the writ petition is dismissed by the High Court, the appellant would be entitled, at the volition of the first respondent, to adjust the amount of Rs.25 lakhs towards the dues claimed from the previous consumer, M/s L.L.C. Steel Pvt. Ltd. and maintain the fresh connection given to the first respondent on it fulfilling its obligations in terms of clause 21A and act on that basis. If the first respondent, does not desire to have a power connection based on clause 21A of the Terms and Conditions of Supply, the appellant will refund the sum of Rs. 25 lakhs to the first respondent without interest within two months of the judgment of the High Court and would disconnect the power connection now given. Of course, if the first respondent fails to deposit the sum of Rs.25 lakhs within the time fixed by us, the appellant would be free to disconnect the power supply granted to the first respondent pursuant to the judgment of the High Court which we have set aside herein and take all steps that may be permissible in law for recovery of the amounts due.

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

Explanation:
1[ds]On a scrutiny of the decisions of the High Court of Bombay giving rise to those appeals, we find that the primary question in those appeals would be the correctness of the view of the High Court that the Electricity Board had no power to impose a condition that the purchaser of an undertaking will have the obligation to clear the arrears of charges of the prior consumer. Of course, incidentally the correctness of some of the observations in Isha Marbles(supra) may also be involved. Anyway, that aspect will also have to be borne in mind while we consider the elaborate submissions made before us in this appeal.The position obtaining in Isha Marbles(supra) was akin to the position that was available in the case on hand in view of the Haryana Government Electrical Undertakings (Dues Recovery) Act, 1970. There was no insertion of a clause like clause 21A as in the present case, in the Terms and Conditions of Supply involved in that case. The decision proceeded on the basis that the contract for supply was only with the previous consumer and the obligation or liability was enforceable only against that consumer and since there was no contractual relationship with the subsequent purchaser and he was not a consumer within the meaning of the Electricity Act, the dues of the previous consumer could not be recovered from the purchaser. This Court had no occasion to consider the effect of clause like clause 21A in the Terms and Conditions of Supply. We are therefore of the view that the decision in Isha Marbles(supra) cannot be applied to strike down the condition imposed and the first respondent has to make out a case independent on the ratio of Isha Marbles(supra), though it can rely on its ratio if it is helpful, for attacking the insertion of such a condition for supply of electrical energy. This Court was essentially dealing with the construction of Section 24 of the Electricity Act in arriving at its conclusion. The question of correctness or otherwise of the decision in Isha Marbles(supra) therefore does not arise in this case especially in view of the fact that the High Court has not considered the question whether clause 21A of the terms and conditions incorporated is invalid for any reason.15. In the light of what we have stated above we think that the proper course to adopt is to set aside the judgments of the learned Single Judge and that of the Division Bench and remit the writ petition filed by the first respondent to the High Court for a fresh decision in accordance with law. The first respondent would be free to amend its writ petition including the prayers therein and in the case of such an amendment the appellant would be entitled to file an additional statement in opposition. The writ petition will be considered afresh by the High Court in the light of what we have stated above.16. It is seen that after the High Court allowed the writ petition, the connection was restored to the first respondent in obedience to the writ, even though subsequently, this Court stayed the operation of the judgment of the High Court by its order dated 5.7.2006. It is now brought to our notice that a fresh connection has been provided to the first respondent in the light of the direction in the judgment under appeal without collecting the arrears that were due from M/s L.L.C. Steel Pvt. Ltd. Strictly, in view of the fact that we have set aside the judgment of the High Court, the first respondent should lose the benefit of the fresh connection. But considering that the first respondent is an industrial undertaking and taking note of the plea that investments have been made by it to make the unit workable, we think that it will be appropriate to direct the first respondent to deposit a portion of the amount in arrears as a condition for continuance of the supply to it by the appellant on payment of regular monthly bills as per the terms and conditions between the parties. We, therefore, direct that if the first respondent pays to the appellant, without prejudice to its contentions in the writ petition, a sum of Rs.25 lakhs (rupees twenty five lakhs) within a period of six weeks from today, the fresh connection given to the first respondent will not be disconnected by the appellant, until the writ petition is disposed of afresh by the High Court pursuant to this order of remand. In case the High Court accepts the challenge of the first respondent to clause 21A as inserted in the terms and conditions of supply, the appellant will refund the sum of Rs.25 lakhs with six per cent interest thereon from the date of payment by the first respondent till the date of its return by the appellant. In case the writ petition is dismissed by the High Court, the appellant would be entitled, at the volition of the first respondent, to adjust the amount of Rs.25 lakhs towards the dues claimed from the previous consumer, M/s L.L.C. Steel Pvt. Ltd. and maintain the fresh connection given to the first respondent on it fulfilling its obligations in terms of clause 21A and act on that basis. If the first respondent, does not desire to have a power connection based on clause 21A of the Terms and Conditions of Supply, the appellant will refund the sum of Rs. 25 lakhs to the first respondent without interest within two months of the judgment of the High Court and would disconnect the power connection now given. Of course, if the first respondent fails to deposit the sum of Rs.25 lakhs within the time fixed by us, the appellant would be free to disconnect the power supply granted to the first respondent pursuant to the judgment of the High Court which we have set aside herein and take all steps that may be permissible in law for recovery of the amounts due.