TMI Blog2006 (10) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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. Thus, 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. 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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st respondent fails to deposit the sum of ₹ 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. The appeal is allowed. 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. - H.K. SEMA AND P.K. BALASUBRAMANYAN JJ. JUDGMENT: P.K. BALASUBRAMANYAN, J 1. Leave granted. 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 ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 60,48,504/- should also be recovered when the sale was effected by it. The sale by the Financial Corporation was o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd consequently, no relief could be granted to the first respondent unless that condition was also fulfilled by the first respondent. 5. The High Court did not go into the question of the validity or otherwise of the amendment to the Terms and Conditions incorporated as clause 21A on 27.11.2001. The learned single judge accepted the argument on behalf of the first respondent that since there was no charge on the premises for the electricity charges run up by M/s L.L.C. Steels Pvt. Ltd. and the purchase by the first respondent was on 22.4.1999, the amendment promulgated on 27.11.2001 could not be applied in the case of the first respondent and that the appellant- Company was bound to provide the electric connection to the first respondent without insisting on the Terms and Conditions introduced with effect from 27.11.2001. The argument that what was relevant was the date of the application for connection made by the first respondent herein and the application was made after the amended term was incorporated, was brushed aside stating that in the absence of any charge or of contractual liability created against the auction purchaser, the liability could not be fastened unless it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the first respondent submitted that the correctness of the decision in Isha Marbles (supra), which is a three judge Bench decision, has been doubted by a Bench of two judges in Civil Appeal Nos. 5312 and 5313 of 2005 and the appeals have been referred to a Bench of three judges and these appeals can also be so referred. But on scrutinizing the order of reference, this is what we find recorded: Heard. The basic question is whether electricity dues constitute a charge on the property so far as the transferor or the transferee of the unit are concerned. Considering the importance of the issues involved, it would be appropriate if the matters are heard by a three judge Bench. The matters may be placed before Hon'ble The Chief Justice of India for necessary directions. 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant and apply for transfer of service connection and obtain the same by executing a fresh agreement and furnishing a fresh security. Sub-clause (b) provides that reconnection or new connection shall not be given to any premises where there are arrears on any account to the appellant unless the arrears are cleared in advance. It has to be noted that reconnection is related to the premises and arrears again is related to the premises. The amount remitted by the transferee towards arrears are to be adjusted against the dues from the previous consumer. But it is provided that if meanwhile the appellant is enabled to recover the amount from the transferor or consumer, the amount remitted by the transferee-consumer is to be refunded, but without interest. Sub-clause (c) provides that provisions contained in sub-clauses (a) and (b) of clause 21A shall be applicable to an existing consumer also where defaulting amount exists against the premises occupied by such consumer. 9. According to us, the High Court has gone wrong in holding that this newly inserted clause 21A of the terms and conditions was not applicable to the first respondent. It is true that the sale of the underta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' basis. On our interpretation of clause 21A of the Terms and Conditions of Supply as inserted with particular reference to clauses (b) and (c) thereof, we are of the view that the said clauses clearly applied to the first respondent when it made an application on 1.1.2002 seeking a fresh connection for the premises. 10. We find that the High Court has also not referred to the Haryana Government Electrical Undertakings (Dues Recovery) Act, 1970 which came into effect on 27.10.1970. The said Act enabled the Electricity Board, of which the appellant is the successor, to recover the dues to the Board on account of consumption of electrical energy and other charges as defined in that Act to be recovered as an arrear of land revenue notwithstanding anything contained in any other law or instrument or agreement to the contrary. We may set down Section 6 of that Act herein: 6. Recovery of dues, etc., if not paid If the aggregate amount of the various dues, penalty and costs mentioned in the notice of demand served under Section 4 is not deposited with the prescribed authority within sixty days of the date of such service or such extended period as the prescribed authority may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking by the prior consumer, could it be said that it had no authority to do so or that the provision is not a reasonable one in the interests of safeguarding the rights of the appellant? 12. We must notice that the High Court did not consider the effect of the above enactments relating to recovery of dues. Counsel for the first respondent submitted that no such contention was raised in the High Court and even in this petition for special leave to appeal such a contention is not raised. But considering that the contention is based on statutes enacted by the State Legislature and are in force, the arguments cannot be ignored by merely stating that they were not put forward before the High Court, since they have been put forward before us at the time of arguments. At best, the first respondent could plead that it did not get a proper opportunity to meet this contention in the circumstances of this case. 13. We must observe that the decision in Isha Marbles (supra) is by itself not an answer to the validity of clause 21A of the terms and conditions inserted by notification. Under section 49 of the Supply Act, the licensee or rather, the Electricity Board, is entitled to set down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 additio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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