TMI Blog2020 (6) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the respondent (purchaser) - The debate over connection or reconnection would not exist in cases like the present one where both aspects are covered as per clause 8.4 of the General Terms Conditions of Supply. The impugned orders cannot be sustained and are accordingly set aside while opining that appellant No.1 would be well within its right to demand the arrears due of the last owner, from the respondent-purchaser - Appeal allowed. - Civil Appeal No. 1815 of 2020 ( Arising out of Special Leave Petition ( C ) No. 19292/2018) - - - Dated:- 1-6-2020 - Sanjay Kishan Kaul And K. M. Joseph, JJ. For the Appellant : Mr. Rakesh K. Sharma, AOR For the Respondent : Ms. Filza Moonis, AOR JUDGMENT Sanjay Kishan Kaul, J. 1. The respondent is an auction-purchaser of a unit owned by M/s. SB Beverages Private Limited, which failed to pay its dues, resulting in the auction by Syndicate Bank (Secured Creditor) under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act ). The moot point of law, which arises for consideration, is whether the liability towards previou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rve Price: ₹ 5,83,37,000/- (Rupees five crores eighty three Lakhs thirty seven Thousand Only) Total 28 no of Machineries items reserve price: ₹ 3,25,28,000/- (three crores twenty five lakhs twenty eight thousand only) . . . . . . TERMS AND CONDITIONS . . . . . . 21. The successful bidder shall bear the stamp duties, charges including those of sale certificate, registration charges, all statutory dues payable to central/state government, taxes and rates and outgoing, both existing and future relating to the properties. . . . . . . 24. The property is sold in AS IS WHERE IS, WHAT IS THERE IS AND WITHOUT ANY RECOURSE BASIS in all respects and subject to statutory dues if any. The intending bidders should make discrete enquiry as regards any claim, charges/encumbrances on the properties, of any authority, besides the bank s charges and should satisfy themselves about the title, extent, quality and quantity of the property before submitting their bid. For any discrepancy in the property the participating bidder is solely responsible for all future recourses from the date of submission of bid. 25. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arose when he applied to appellant No.1 seeking sanction of a 500 KVA connection required for running the bottling plant. This request was denied on the ground that there were previous electricity dues to the tune of ₹ 50,47,715, as on 26.10.2017. Appellant No.1 asserted its right to recover this amount even from the new purchaser (i.e. respondent), based on a reading of Clauses 5.9.6 and 8.4 of the General Terms and Conditions of Supply of Distribution Retail Supply Licensees in AP (for short General Terms Conditions of Supply ), which clauses are reproduced hereinunder: 5.9.6 Dismantlement of Service Line after Termination of Agreement: On the termination of the LT or HT Agreement, the company is entitled to dismantle the service line and remove the materials, Meter, cut out etc. After termination of the Agreement, the consumer shall be treated as a fresh applicant for the purpose of giving supply to the same premises when applied for by him provided there are no dues against the previous service connection. . . . . . . 8.4 Transfer of Service Connection The seller of the property should clear all the dues to the Company before selling su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26 as in the present E-auction sale notice, which absolved the Authorized Officer of various dues including electricity dues . On the conspectus of the judgments referred to by the respondent, there were no such clauses in the cases in question. 9. We may also notice that there have been subsequent judicial pronouncements dealing with this aspect of electricity dues. A three Judge Bench of this Court has held that the dues under the terms and conditions of supply partake the character of statutory dues (Hyderabad Vanaspathi Ltd. v. A.P. State Electricity Board Ors. (1998) 4 SCC 470). The mere fact that agreements were entered into with every consumer only served the purpose of bringing to the notice of the consumer the terms and conditions of supply, but did not make the dues purely contractual in character. 10. We can draw strength from the observations of this Court in Dakshin Haryana Bijli Vitran Nigam Ltd. v. Paramount Polymers (P) Ltd., (2006) 13 SCC 101 (2 Judges Bench) where there was a similarity as in the present case, of a specific clause dealing with electricity dues. It was observed that in such a scenario if a transferee desires to enjoy the service connectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in Southern Power Distribution Company of Telangana Limited (through its CMD) Ors. (supra) found that the facts were similar to the NESCO (supra) case, and thus followed the same line. 15. We have gone into the aforesaid judgments as it was urged before us that there is some ambiguity on the aspect of liability of dues of the past owners who had obtained the connection. There have been some differences in facts but, in our view, there is a clear judicial thinking which emerges, which needs to be emphasized: A. That electricity dues, where they are statutory in character under the Electricity Act and as per the terms conditions of supply, cannot be waived in view of the provisions of the Act itself more specifically Section 56 of the Electricity Act, 2003 (in pari materia with Section 24 of the Electricity Act, 1910), and cannot partake the character of dues of purely contractual nature. B. Where, as in cases of the E-auction notice in question, the existence of electricity dues, whether quantified or not, has been specifically mentioned as a liability of the purchaser and the sale is on AS IS WHERE IS, WHATEVER THERE IS AND WITHOUT RECOURSE BASIS , there can be no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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