Paschimanchal Vidyut Vitran ... vs M/S Dvs Steels & Alloys Pvt.Ltd.& Ors

2. Paschimanchal Vidyut Vitran Nigam Ltd., the appellant herein holding an electricity distribution licence, is one of the successors-in- interest of Uttar Pradesh State Electricity Board (`Board' for short). The third respondent was a consumer receiving electricity supply from the Board to its industrial unit at Ghaziabad. In April, 1994, the Board raised 2 supplementary bills for Rs.105.78 lakhs against the third respondent towards difference in tariff (on the basis of an audit objection that supply ought to have been charged under HV2 category instead of HV1 category). The third respondent filed civil suits disputing the said claim and obtained an order of injunction restraining the Board from recovering the said supplementary bills amount. The Board challenged the order of the civil court by filing appeals before the Allahabad High Court. In those appeals, which are stated to be pending, on 13.12.1996 the High Court stayed the order of injunction granted by the civil court thereby permitted recovery of the outstanding dues.

3. The third respondent closed its unit in the year 1998. In 2001-2002, it sub-divided its industrial plot into 129 smaller plots of different sizes with the permission of Uttar Pradesh State Industrial Development Corporation. One of those plots (A-7/60-67) was sold by the third respondent to the first respondent.

4. The first respondent applied to the appellant (who had succeeded UPSEB by then) for supply of electricity by sanctioning a load of 3200 KVA for running an induction furnace in the plot purchased by it. The appellant sanctioned the request on 4.9.2004 subject to the condition that it 3 should pay the arrears due by the third respondent, in proportion to the area purchased by it, as a condition precedent for supply of electricity. The first respondent agreed to the demand and gave an undertaking that the pro-rata electricity dues of the third respondent would be paid by them. The appellant thereafter called upon the first respondent to pay Rs.8,63,451/- being the arrears, on pro rata basis, by letter dated 9.9.2004 subject to the following condition:

Accordingly on 18.9.2004 the first respondent deposited a sum of Rs.863,451/- being the dues of the third respondent, pro rata, subject to the condition that in the event of the pending challenge to the demand being decided in favour of third respondent, the appellant shall refund the amount deposited by first respondent.

5. Several other plot-purchasers from third respondent, did not pay the dues of the third respondent. Appellant did not give them electricity supply. Therefore, in November, 2005, the third respondent moved an application before the Uttar Pradesh Electricity Regulatory Commission 4 (`Commission' for short) complaining that the appellant was arbitrarily refusing power connection to the purchasers of sub-divided plots on the ground that Rs.105.78 lakhs was due by third respondent, though the said liability was disputed and was pending adjudication in court. The Commission by order dated 25.11.2005, issued the following directions to the appellant : (i) to accept a bank guarantee from the third respondent in regard to the disputed claim of Rs.105.78 lakhs; and (ii) on the third defendant furnishing guarantee, release new power connections to the purchasers of sub-divided plots from the third respondent, without insisting upon payment of any amounts towards the alleged dues of third respondent. In pursuance of the said order, the third respondent furnished a bank guarantee on 5.12.2005 for Rs.105.78 lakhs to the appellant. Thereafter the appellant did not demand payment of the pro-rata amount in regard to the arrears of third defendant, from the purchasers of the sub- divided plots seeking new power connections.

7. Feeling aggrieved, the first respondent filed W.P. No.59163/2006 seeking a direction to the appellant not to recover from it, any dues of the third respondent. It also sought a consequential direction to appellant to refund the sum of Rs.8,63,451/- with interest at 12% per annum. The High Court by order dated 14.5.2007 allowed the said writ petition and directed the appellant to refund the sum of Rs.8,63,451/- with interest at the rate of 6% per annum from the date of payment. The High Court was of the view 6 that the amounts said to be due by third respondent were secured by a bank guarantee furnished by the third respondent, and therefore there was no need to retain any amount from the purchasers of the sub-divided plots. The said order is challenged in this appeal by special leave. Whether the supplier can recover the electricity dues from the purchaser of a sub-divided plot ?

13. On 25.11.2005, the Commission passed an order that the appellant should not demand payment of pro rata arrears, from the purchasers of plots who seek new connections to their respective portions, if the third respondent furnished a bank guarantee for its outstanding dues. The Commission directed the third respondent to furnish a Bank Guarantee for the dues, because the claim under the supplementary bills was disputed by the third respondent and the tenability of the claim was pending consideration in court. But the first respondent had voluntarily paid Rs.8,63,451/- being the pro rata dues on 18.9.2004 long before the 11 Commission issued the interim order on 25.11.2005. Though the Commission directed that the appellant should not demand or recover any arrears from the purchasers of sub-divided plots applying for fresh connection, after the third respondent furnished the bank guarantee, it did not direct refund of amounts already paid by applicants seeking fresh connection. In this case, the first respondent had voluntarily paid the said amount to the appellant to obtain a fresh electricity connection. It cannot seek refund on the basis of any subsequent order of the Commission, in the absence of a specific direction for refund. The first respondent having paid the said amount in pursuance of its undertaking as a condition for obtaining fresh connection, is estopped from claiming the amount back, except in accordance with the terms subject to which the payment was made. The amount deposited by first respondent will however have to be refunded by the appellant, with appropriate interest, if the third respondent is ultimately found to be not liable in respect of the demand under the supplementary bills, or if third respondent actually clears the dues.

Whether appellant is liable to refund the pro rata payment made by first respondent ?

14. In view of the above, we allow this appeal, set aside the order of the High Court and dismiss the writ petition of the first respondent.