TMI Blog1980 (7) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... in liquidation) consumers on account of arrears of charges of electricity supplied to them by the company (in liquidation) up to the midnight of 4th/5th of February, 1975, which the respondent-Board is now holding for and on behalf of the company (in liquidation) and/or in trust for and as agent of the company (in liquidation) within a week from the date of the order and render a complete account of such collections. The admitted facts are that the company before it was voluntarily wound up acquired the right to generate, supply and distribute its electrical energy to its consumers within and outside the municipal city of Benaras known as "Varanasi" and the company's right to generate, supply and distribute was subject to the terms and conditions of the licence and the Indian Electricity Act, 1910. The said licence was granted for a period of 50 years. By a letter dated the 1st of February, 1974, addressed to the managing agent of the company (now in liquidation), M/s. Martin Burn Ltd., a notice under section 6 of the Indian Electricity Act, 1910, was given to sell and deliver the undertaking of the said company to the respondent, the said Board, on the expiry of the initial peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny (in liquidation) payable to the company up to the date of the taking over and there was still Rs. 19,31,656.32 outstanding on account of the said arrears of bills from the consumers of the company prior to the date of taking over by the Board. It now appears that the amount payable to the company (in liquidation) has not yet been fixed by the Special Officer under the U.P. Electricity (Amendment Validation) Act, 1975, read with the Amendment Act, 1974. Now, the whole question in this application is whether the Board is liable to pay the said arrears of electricity charges collected by it, after the date of the taking over up to the date of the order, from the consumers of the company (in liquidation) on account of the electrical energy supplied up to the date of the taking over, to the liquidators. The said question depends on the interpretation of the word "undertaking" within the Indian Electricity Act, 1910, and also the U.P. (Amendment) Acts, 1974 and 1975, as it is an admitted position that no amount' payable according to the said Electricity Act and the U.P. (Amendment) Act has yet been quantified or fixed or ascertained by the Special Officer appointed within the me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)( b ) and (4) of the Companies Act, 1956. Mr. Mukherjee also referred to section 293(1)( a ) of the Companies Act, 1956, where the word "undertaking" has also been used but does not include the book debts on the face of it. He also referred to the definition of the word "undertaking" in the MRTP Act, and the Coal Mines Nationalisation Act, 1973, and the Sick Textile Mills Nationalisation Act, 1975, where the word "undertaking" has been defied and has been made inclusive of book debts. In the present Act, there is no such inclusive definition; on the other hand, reading the Indian Electricity Act, 1910, and the U.P. Amendments of 1974 and 1975, of the relevant sections, it makes it clear that the arrears of electricity charges up to the date of the taking over, being the book debt due to the company (in liquidation) and not vested in the Board after the date of taking over and, therefore, the court should pass an order as asked for. Mr. D. P. Gupta, appearing with Mr. Ramen Mitra, for the respondent Board, submitted that the word "undertaking" includes the book debts on the date of vesting. He referred to section 7A as amended by the U.P. (Amendment Validation) Act, 1975, sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word "undertaking" within the meaning of the Electricity Act, 1910, as also the U.P. Amend. Acts, 1974 and 1975. I have looked into the dictionary meaning of the word "undertaking" which does not help in any way, as for example, I am quoting from the Concise Commercial Dictionary by Osborn and Grandage where the word "undertaking" has been defined as follows: "The works, functions or concern of a public utility company". I have also looked into the meaning of the word "undertaking" in the Oxford Dictionary. There also the meaning has no relation to the book debts or assets of the company. On the other hand, there are different meanings of the word "undertaking". The admitted position is that the said Board has collected the arrears of charges payable to the company in liquidation up to the date of taking over as it is admitted in the various letters annexed to the affidavit which is the ground of this application as earlier referred to and the amount is also specified in the said letters as hereinbefore stated. It is also admitted that the said amount was collected on behalf of the company in liquidation by the said Board after the taking over on the midnight of 4/5th February ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over which belonged to the company in liquidation is also liable to be appropriated or vested within the Board, and, in my view, that is not the correct interpretation of the said sub-section. On the other hand, if it is correctly read, it presupposes the right to the said arrears of electricity charges of the said company in liquidation, which were payable by the consumers, prior to the date of taking over by the Board, to the company, which can be collected by the Board on behalf of the company for the purpose specified in the said sub-clause ( f ) of section 7A(5) of the U.P. Amend. Act. Therefore, the admitted position is that the said Board has realised the arrears of charges which were due from the consumers of electricity of the said company in liquidation prior to the date of taking over, which amount has been admitted by them in their various letters from time to time written to the said company. If the word "undertaking" does not include the book debts then it cannot be said that the U.P. State Electricity Board, the respondent herein, is entitled to the same and there may be a situation that the same was to be set off against the Board's claim, which has not yet been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In short, a right to set off is recognised, but, in my view, the said decision has no application to the present case as the Board, which has collected the arrears of charges from the consumers of the company in liquidation after the date of taking over by the Board, which were payable to the company in liquidation before the date of taking over, cannot become a creditor of the company in liquidation in respect of the said amount collected by them as trustee or agent on behalf of the company. Section 529 makes the rules of insolvency applicable as regards the debts and liabilities prevailing between a company in liquidation and a creditor. Here the Board cannot be said to be a creditor to the extent of the collections made by them of the arrears of electricity charges payable to the company in liquidation up to the date of the taking over. The said decision and the said section have no application to the facts of the present case. In these circumstances, having regard to the meaning of the word "undertaking", as can be gathered from the said Indian Electricity Act, 1910, and the U.P. Amendments, it is quite clear that it does not include the book debts, particularly the arrears ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears of electricity charges, which are the assets of the company in liquidation, and the Joint Liquidators are entitled to the said amount which has been collected by the U.P. State Electricity Board, being the respondent herein, for and on behalf of the company in liquidation as trustee or agent. This position is unassailable and in fact admitted in the correspondence and, therefore, the Joint Liquidators, who have made the present application under section 518(1)( a ), ( b ) and (4) of the Companies Act, 1956, read with section 468 of the Companies Act are entitled to an order which has been asked for. Therefore, I am making an order in terms of prayer ( a ) directing the respondent Board to pay the said amount of Rs. 68,29,636.87 together with interest at the rate of 6% per annum from the date of realisation of the said bills until payment being the arrears of electricity charges supplied to the consumers of the said company in liquidation up to the midnight of 4/5th February, 1976, as the said sums were collected by the respondent-board as trustee or agent on behalf of the company in liquidation. Such payment to be made to the Joint Liquidators within a fortnight from date. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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