Southern Power Distribution Company of Telengana Ltd. through its CMD & Ors. vs Gopal Agarwal & Ors.

SOUTHERN POWER DISTRIBUTION COMPANY OF TELENGANA LTD. THROUGH ITS CMD & ORS. .... Appellant(s) Versus GOPAL AGARWAL & ORS. ….Respondent(s)

JUDGMENT

L. NAGESWARA RAO, J.

The Writ Petition filed by Respondent No.1 challenging

the action of the Appellants in not releasing the Low

Tension (domestic) Power Supply was allowed by a Single

Judge of the Andhra Pradesh High Court. The appeal filed

by the Appellants was dismissed by the Division Bench.

Challenging the legality and validity of the said judgment Signature Not Verified Digitally signed by MEENAKSHI KOHLI Date: 2017.07.27 18:21:34 IST the Appellants have approached this Court by filing this Reason:

appeal.

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2. The City Union Bank Limited, the Second Respondent

herein issued a tender/sale notice under SARFAESI Act,

2002 for sale of land, plant and machinery in Survey

Nos.168/169 in Bollaram village, Medak district which

belonged to M/s J.T. Alloys Private Limited. The property

was brought to sale due to default in payment of the

outstanding loan amount. It was stated in the tender/sale

notice dated 22.02.2006 that the sale would be on “as is

where is” condition. The First Respondent participated

in the auction and was declared the highest bidder in

respect of dry land measuring 0.36 hectares in Survey

No.168, Bollaram village. A certificate of sale was issued

by the authorised officer of the Respondent-Bank on

12.04.2006 and the delivery and possession of the

property sold was made free from all encumbrances

known to the secured creditor on receipt of

Rs.1,12,50,000/-.

3. Appellant No.3, the Superintending Engineer, Operation

Circle Medak, informed the Respondent-Bank that an

amount of Rs.1,88,23,185/- was due towards electricity

charges from M/s J.T. Alloys Private Limited. The Third

Appellant requested the Bank to transfer the residual 2 amount realised from the sale for adjustment towards

arrears payable by M/s J.T.Alloys Private Limited. The

Bank informed the Third Appellant that there was no

amount left after utilisation of the sale proceeds towards

its dues.

4. The First Respondent applied for a Low Tension

(domestic) electricity connection to the premises which

he purchased in the auction conducted by the Second

Respondent-Bank. As there was no response from the

Appellants, the First Respondent filed a Writ Petition in

the High Court of Andhra Pradesh. The said Writ Petition

was allowed by a judgment dated 23.02.2007 on the

ground that the Petitioner cannot be denied the power

supply connection due to non payment of arrears

payable by the previous owner of the property. The

learned Single Judge of the High Court of Andhra Pradesh

relied upon two judgments of this Court in Ahmedabad

Electricity Co. Ltd. v. Gujarat Inns (P) Ltd. , (2004)

3 SCC 587 and Isha Marbles v. Bihar State

Electricity Board, (1995) 2 SCC 648.

5. A Division Bench of the High Court confirmed the

judgment of the Single Judge by dismissing the appeal

3 filed by the Appellants. The Division Bench held that

there was no evidence produced before the Court to

show that the First Respondent had undertaken to

discharge the liability of the previous consumer. It was

also held that the Appellants cannot withhold the supply

of power to Respondent No.1 on the specious ground

that the arrears have not been cleared by the previous

consumer. The Appellants, as stated earlier, have filed

this appeal assailing the said judgment of the High Court.

6. We have heard the learned counsel appearing for the

parties and we are of the opinion that there is no reason

to interfere with the judgment of the High Court. The

High Court relied upon the judgment in Isha

Marbles(supra) to grant relief to the First Respondent.

It was held in the said judgment that an auction

purchaser cannot be called upon to clear the past

arrears. It was also held that a power connection to an

auction purchaser cannot be withheld for the dues of the

past owner. The High Court also referred to a judgment

in Ahmedabad Electricity Company Limited(supra)

wherein the ratio of the judgment in Isha Marbles case

was reiterated, particularly with reference to a fresh

4 connection for supply of electricity. In NESCO v.

Raghunath Paper Mills (P) Ltd., (2012) 13 SCC 479,

the purchaser in an auction sale conducted by the official

liquidator on “as is where is” and “whatever there is”

basis was found not liable for payment of the electricity

arrears. In the said case an advertisement was issued

by the official liquidator for sale of moveable and

immoveable property of M/s Konark Paper and Industries

Limited on “as is where is” and whatever there is” basis.

The auction purchaser applied for a fresh electricity

connection to its unit which was denied on the ground of

non payment of arrears by the past owner. After

considering the judgments in Ahmedabad Electricity

Company (supra) and Isha Marbles (supra), this

Court held that the request of the auction purchaser for a

fresh connection could not have been rejected.

7. The facts of this case are similar to that of NESCO v.

Raghunath Paper Mills (P) Ltd., (2012) 13 SCC 479.

The tender/sale notice mentioned that the property was

being auctioned on “as is where is” basis. The First

Respondent applied for a fresh connection and he is in no

way connected to the past owner. He has also not

5 undertaken to pay the past arrears of the previous

owner. In view of the above, the Appeal is dismissed.

…................................J [L. NAGESWARA RAO]

.......................................J [NAVIN SINHA]

New Delhi, July 27, 2017

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