Haryana State Electricity Board vs M/S. Hanuman Rice Mills Dhanauri & Ors

2. The second respondent - Haryana Financial Corporation auctioned the rice mill premises of one of its borrowers - Durga Rice Mills, to recover its dues. The first respondent purchased the said premises at the auction on 14.12.1990 for a consideration of Rs. 15,25,000/- and paid the entire sale consideration to the second respondent. When the first respondent purchased the mill premises, electricity supply to the premises had been disconnected. After taking possession of the premises, the first respondent applied for and obtained electricity connection in its own name in the year 1991. Four years later, the appellant served upon the first respondent, a notice dated 16.1.1995 2 demanding payment of Rs.2,39,251/- towards arrears of electricity charges due by the previous owner Durga Rice Mills.

3. The first respondent filed a civil suit for permanent injunction and the said suit ended in dismissal on 5.12.1996 which was affirmed by the appellate court on 27.2.1998. Thereafter the appellant served a notice dated 2.3.1998 informing the first respondent that the electricity supply will be disconnected if the said arrears due by Durga Rice Mills were not paid. This was followed by disconnection of electricity supply on 9.3.1998. First respondent filed a suit challenging the said demand and disconnection of electricity supply. The said suit was dismissed by the trial court. While dismissing the suit, the trial court held that the claim of the appellant was barred by limitation. Feeling aggrieved by the dismissal, the first respondent filed an appeal; and feeling aggrieved by the finding that appellant's claim was barred by limitation, the appellant filed an appeal. The first appellate court decided the appeals by a common judgment dated 30.10.2003. It dismissed the appeal filed by the appellant and allowed the appeal filed by the first respondent. It held that first respondent could not be made liable for the dues of the previous owner, as there was no provision in the terms and conditions of sale that the electricity dues of the previous owner should be paid by the first respondent as auction 3 purchaser. The judgment of the first appellate court was challenged by the appellant by filing a second appeal. The Punjab & Haryana High Court by its judgment dated 8.8.2005 dismissed the said appeal holding that the liability of a consumer to pay charges for consumption of electricity, cannot be fastened on a subsequent auction purchaser of the property, in view of the decision of this court in Isha Marbles vs. Bihar State Electricity Board - (1995) 2 SCC 648.

5. The first suit by the first respondent was for a permanent injunction to restrain the appellant Board from enforcing the demand notice dated 16.1.1995 in respect of the electricity consumption charges incurred by the previous owner. By the second suit, the first respondent sought a declaration that the notice dated 9.3.1998 threatening disconnection of electricity supply for non-payment of the arrears of the previous owner and the consequential disconnection dated 9.3.1998, were invalid and for consequential relief. The matter that was directly and substantially in issue in the second suit was completely different from the matter that was directly and substantially in issue in the first suit. The reliefs claimed were also different, as the first suit was for a permanent injunction and the second suit was for a declaration and consequential relief. Therefore the second suit was not barred by res judicata. Re : Point No. (ii)

9. The position therefore can may be summarized thus :

Position in this case

11. On facts, it has to be held that the decision of the High Court does not call for interference. The appeal is therefore dismissed. Parties to bear their respective costs.

August 20, 2010