Dakshin Haryana Bijli Vitran Nigam Ltd vs M/S. Paramount Polymers Pvt. Ltd

2. M/s L.L.C. Steels Pvt. Ltd. was a consumer of electricity from the appellant, a distributing company established in the place of the State Electricity Board. It allegedly fell into arrears to the tune of Rs.64,23,695/- towards consumption charges of electrical energy including interest and other incidental charges. Because of the failure to pay the consumption charges, the power to the undertaking was disconnected on 6.4.1998. M/s L.L.C. Steels Pvt. Ltd. had also borrowed amounts from the Haryana Financial Corporation and had mortgaged the undertaking to the Financial Corporation. In exercise of power under Section 29 of the State Financial Corporations Act, 1951, the undertaking was taken over by the Financial Corporation and advertised for sale. In the advertisement, the undertaking was offered for sale on "as is where is basis". The first respondent herein bid the undertaking and its bid was accepted. Possession was given by the Financial Corporation to the first respondent on 22.4.1999.

3. On 27.11.2001, the appellant- Company decided to incorporate a term in the Terms and Conditions of Supply of electrical energy by providing that in cases where a consumer had defaulted in paying electrical charges and there had been a consequent disconnection of supply, no fresh connection in respect of the premises would be given to a purchaser unless the purchaser cleared the amount that was left in arrears by the consumer whose undertaking had been purchased. It is seen that the first respondent applied for a connection on 1.1.2002. The appellant- Company took the stand that unless the first respondent paid the amount outstanding against M/s L.L.C. Steels Pvt. Ltd., the prior consumer, no fresh connection could be given to the first respondent. Since the first respondent was not willing to comply, the application of the first respondent was rejected. The first respondent thereupon filed a suit, Civil Suit No. 23 of 2002 in the Court of Civil Judge (Senior Division), Faridabad, seeking to restrain the appellant- Company from interfering with the use of generators by the first respondent for generating electricity for its use and for a mandatory injunction directing the appellant- Company to give a fresh electric connection to the first respondent without insisting on the clearing of the dues of the prior owner of the premises. Even while the suit was pending, the first respondent filed a Writ Petition, Civil Writ Petition No. 5350 of 2002 in the High Court of Punjab & Haryana praying for the issue of a writ of certiorari to quash the circular dated 27.11.2001 introducing a condition for fresh connection only on payment of the dues of the previous consumer of electricity in the premises concerned, for a writ of prohibition restraining the appellant from removing the generators installed by the first respondent in the premises, for a writ of mandamus directing the appellant to provide electric connection temporarily to enable the first respondent to run its factory during the pendency of the Writ Petition and for other incidental reliefs. The scrutiny of the prayers made in the Writ Petition shows that there was no prayer for a writ of mandamus directing the appellant- Company to provide a permanent electric connection to the first respondent. The appellant resisted the Writ Petition submitting that the first respondent having already approached the Civil Court for relief, the Writ Petition was not maintainable. It was further contended that the Circular dated 27.11.2001 sought to be challenged in the Writ Petition was issued in exercise of power under Section 49 of the Electricity (Supply) Act, 1948 by the competent authority thereunder and that incorporation of such a condition in the Terms and Conditions of Supply was statutory in nature and was perfectly valid. It was also pleaded that the fact that a substantial amount was due to the appellant from M/s L.L.C. Steels Pvt. Ltd. was brought to the notice of the Financial Corporation and a request was made that the amount of Rs.60,48,504/- should also be recovered when the sale was effected by it. The sale by the Financial Corporation was on "as is where is basis" and hence the first respondent was liable for the dues run up in respect of the premises by the prior consumer. It was submitted that there was no merit in the Writ Petition and it was liable to be dismissed.

But the amount already remitted by him/her shall not bear any interest.

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.

17. The appeal is allowed in the above manner. There will be no order as to costs. The High Court is requested to expeditiously dispose of the writ petition afresh according to law and in the light of the observations contained herein.