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Bhavani vs Torrent on 27 August, 2008

Gujarat High Court
Bhavani vs Torrent on 27 August, 2008
Author: Jayant Patel,&Nbsp;
   Gujarat High Court Case Information System 

  
  
    

 
 
    	      
         
	    
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CA/83/2708	 14/ 14	ORDER 
 
 

	

 

 


 

 


 

IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
 

 


 

CIVIL
APPLICATION - FOR ORDERS No. 8327 of 2008
 

In


 

SPECIAL
CIVIL APPLICATION No. 17053 of 2007
 

 
=========================================================

 

BHAVANI
CORPORATION - Petitioner(s)
 

Versus
 

TORRENT
POWER LIMITED & 3 - Respondent(s)
 

=========================================================
 
Appearance
: 
MR
PK PANCHOLI for
Petitioner(s) : 1, 
NOTICE SERVED BY DS for Respondent(s) : 1 -
4. 
MR KB PUJARA for Respondent(s) : 1, 
MR HH PARIKH, AGP for
Respondent(s) :
3, 
=========================================================


 
	  
	 
	  
		 
			 

CORAM
			: 
			
		
		 
			 

HONOURABLE
			MR.JUSTICE JAYANT PATEL
		
	

 

 
 


 

 
 


 

Date
: 27/08/2008 

 

 
 
ORAL
ORDER

The
present application is preferred by the applicant to direct
respondent to grant electricity connection and to supply of
electricity, subject to final result of the petition.

Mr.

Pancholi learned Counsel for the applicant at the outset submitted
that the applicant is ready to deposit 50 percent of the outstanding
amount, and is also ready to file undertaking for 50 percent
remaining amount, if this Court is inclined to consider the matter
for ordering supply of electricity to the applicant, as per the view
taken by the Division Bench of this Court in Letters Patent Appeal
No. 278 of 2008 and allied matters dated 24.3.2008.

Heard
Mr. Pancholi learned Counsel for the applicant, Mr. Pujara learned
Counsel for the electricity company -opponent Nos. 1 and 2, Mr.
Parikh learned AGP for opponent No. 3 and Ms. Niyati Shah for Mr.
D.K. Puj learned Counsel for opponent No. 4.

It
deserves to be recorded that the Division Bench of this Court in
case of Torrent Power AEC Limited v. Shreeji (Rakhial)
Commercial Co-operative Housing Society Limited
reported at AIR 2006
Guj. 190, observed at para 7 to 11 as under:

?S7.

On a conjoint reading of the provisions it is not possible to accept
the case of the respondent ? Company. Section 43 of the Act deals
with ?Sduty to supply power on request??. Under sub-section (1) of
Section 43 of the Act it is provided that on an application by the
owner or occupier of any premises the distribution licensee is bound
to give supply of electricity to such premises, within one month of
the receipt of the application for such supply. The emphasis on
behalf of the respondent-company that the electricity is required to
be supplied ?Sto such premises?? is misplaced. In the first
instance, the application is by the owner or occupier of any
premises, and hence, the phrase ?Ssuch premises?? takes meaning
from the preceding portion viz. owner or occupier of the premises.
This becomes abundantly clear when one reads the definition of the
term ?Sconsumer?? which talks of any person who is supplied
electricity and includes any person whose premises are for the time
being connected for the purpose of receiving electricity. In other
words, the consumer is one who receives, or is supplied electric
power and the premises are of the consumer. Section 2(70) which
defines ?Ssupply?? specifically states that supply means sale of
electricity to a consumer. The definition does not talk of supply of
electricity to the premises.

8.
When one proceeds to read Section 56 of the Act in the aforesaid
backdrop, it is apparent that supply of electric power can be
dis-connected where any person neglects to pay any charge for
electricity in respect of supply which was made to the said person.
Section 56 of the Act does not talk of any premises neglecting to
pay any charge for electricity. In fact premises cannot be a
consumer and, therefore, the stand of the electricity company does
not merit acceptance. It goes without saying that only a person can
be the consumer viz. the user of the electricity power and premises,
divorced of a person, cannot be user of the electricity power
supply.

9.
The Regulations of the Supply Code also do not carry the case of the
respondent-company any further. Regulation 4.1.11 only states that
in case of a new connection etc., an application need not be
entertained unless any due of the applicant
in respect of any other service connection held in his name have
been cleared. Meaning thereby the same consumer cannot apply for a
new connection etc. unless and until dues of any other service
connection held in the name of the same consumer are cleared.
Similarly, Regulation 4.1.16 stipulates that where in any area there
are two competing distributors of power supply a distributor shall
give No Dues Certificate to the consumer to avoid any possibility of
pending dues of previous owner while purchasing new house premises,
if the consumer makes such a request. From that it does not flow
that if the consumer does not obtain such a No Dues Certificate he
cannot be granted a new connection because of outstanding dues of
previous owner.

10.
Regulation 4.1.17 instead of assisting the case of the
respondent-Company works to the advantage of the consumer. It is
provided in the said regulation that the distributor shall not
provide more than one connection for one premises, but where a
consumer opts for a second connection/meter such consumer will have
to produce documents showing existence of a separate legal entity
such as separate Permanent Account Number, separate Sales Tax
Number, separate ration card and/or a rent/lease agreement. In other
words, once there is a separate legal entity in existence, in the
same premises there could be more than one connection in case the
same premises are occupied by two or more independent legal
entities. Therefore, this Regulation gives an inherent indication in
the scheme of the Act and the Regulations that the connection is not
to the premises but to the person viz. a separate legal entity. It
is necessary to take note of the definition of the term ?Sperson??
which is defined by Section 2(49) of the Act to include any company
or body corporate or association or body of individuals, whether
incorporated or not, or artificial juridical person.

11.
Similarly, Regulations 4.8.1 and 4.8.3 falling under the head
??Transfer of Service connection?? cannot come into play in the
case of a third party auction purchaser at a public auction.
Regulation 8.7.5 stipulates that where power supply is disconnected
for non-payment of any charges the consumer will not be permitted to
obtain electricity connection from any other distributor. This
regulation also does not stipulate that the supplier can withhold
supply of power and reject an application for new connection in case
of a third party auction-purchaser.??

The
Division Bench in paragraph No. 13 also inter alia observed that if
the property is purchased at the public auction held under the aegis
of the Company Court and one cannot term a company which is wound up
to be a dishonest consumer. It is true that matter is carried before
the Apex Court against the judgement of the Division Bench. However,
Mr. Pujara learned Counsel for the electricity company is not in a
position to show any material before this Court that the view taken
by the Division Bench is stayed by the Apex Court. The aforesaid is
coupled with the circumstance that subsequently, in more or less
similar issue Division Bench of this Court vide order dated
24.3.2008 in Letters Patent Appeal No. 278 of 2008 directed for
supply of the electricity on condition that 50 percent amount to be
deposited, and for balance 50 percent amount, the undertaking is to
be given by the person concerned that in the event the petition is
dismissed, he will pay balance 50 percent amount.

Mr.

Pujara learned Counsel for the electricity by heavily relying upon
the decision of the Apex Court in case of Dakshin Haryana
Bijli Vitran Nigam Ltd. v. M/s. Paramount
polymers Pvt. Ltd.,
reported at Judgement Today 2006(9) SC 349 contended that
the view taken by the Apex Court is different, and unless 100
percent payment is made of the outstanding dues of the previous
owner, this Court may not order for supply of electricity.

It
deserves to be recorded that in the case before the Apex Court, the
Clause No. 21A, which has been referred to at paragraph No. 8, was
under:

?S8.

21A(b) Reconnection or new connection shall not be given to any
premises where there are arrears on any account due to the Nigam
unless these are cleared in advance. If the new
owner/occupier/allottee remits the amount due from the previous
consumer, the Nigam shall provide reconnection or new connection
depending upon whether the service remains disconnected/dismantled as
the case may be. The amount so remitted will be adjusted against the
dues from the previous consumer, if the Nigam get the full or partial
dues from the previous consumer through legal proceedings or
otherwise, the amount remitted by the new owner/occupier to whom the
connection has been effected shall be refunded to that extent. But
the amount already remitted by him/her shall not bear any interest.??

Whereas,
Supply Code 4.1.11, which is pressed in service by the learned
Counsel for the electricity company, Mr. Pujara reads as under:

?S4.1.11
An application for new connection, reconnection, addition or
reduction of load, change of name or shifting of Service Line need
not be entertained unless any dues of the Applicant to the
Distribution Licensee in respect of any other service connection
held in his name anywhere in the jurisdiction of the Distribution
Licensee have been cleared??

Therefore,
as such the observations which are pressed in service by the learned
Counsel for the electricity company by relying upon the decision of
the Apex Court in case of Dakshin Haryana Bijli Vitran Nigam
Ltd. (supra) may not apply to the facts of the present case,
but the very Supply Code 4.1.11, which has been considered by the
Division Bench of this Court in case of Torrent Power AEC
Limited (supra) would directly apply to the facts of the
present case, of course subject to the final decision, which may be
taken by the Apex Court in the SLP against the aforesaid decision of
the Division Bench.

There
is one additional aspect, which also deserves to be considered, and
recorded and the same is that the electricity dues by virtue of the
agreement of the electricity company with the consumer, as it is,
would not create any charge or interest in the property nor such
charge or interest is identified, as per the Provisions of the
Transfer of Properties Act. Therefore at the most, such dues may
stand as the outstanding amount, to be recovered or recoverable from
the consumer, who enjoyed the electricity supply. Further, it is not
a case of voluntary transfer or the transfer effected by action of
the parties namely purchaser and the seller, which normally can be
termed as transfer and the consequence may arise for transfer of the
connection also based on the same. But in any cases where, the sale
has been effected by way of statutory fiction, or due to any
coercive order, as per the statutory Provisions, the question may
remain as to whether the enforcement of statutory Provisions would
march over Provisions of Supply Code, which at the most, can be
termed as by way of subordinate legislation. Such subordinate
legislation normally cannot be allowed to operate on the face of the
laws, made by the Parliament. The other similar consequences, which
may have bearing to the cases, in which the sale has been taken
place by way of statutory fiction or coercive action under the
statutory Provisions are that, in respect to the dues including that
of the Government dues, may be sales tax, income tax or other dues,
if the person has purchased the property, and if he is to undertake
the separate and distinct activity over the same property, whether
such outstanding dues of the Government would prohibit the person
concerned to undertake the activity? In normal circumstances, answer
would be no. Therefore, if the person by purchasing the property
irrespective of the outstanding dues of the Government, may be sales
tax, income tax, central excise etc., is in a position to utilise
the property by way of a fresh licence or otherwise, there is no
prima facie reasons to foreclose such right by non availability of
the electricity supply.

I
am inclined to take such prima facie view, due to the peculiar
circumstances that the electricity dues with the previous consumer
is only created by way of agreement, and it has not created any
charge or interest in the property, and it only prohibits to that
consumer to transfer, or to get the new connection, unless the
outstanding dues are cleared as per the Supply Code. Therefore, if
the Government dues though are recoverable, the distinct and
separate activity can be undertaken in the very property by the
purchaser, on the premise that the Government dues would stand in
later priority with the dues of the secured creditors. The
outstanding dues of the electricity cannot be put on higher pedestal
than Government dues over the property, in cases where, there is
sale by statutory fiction, unless it is a case where the property is
transferred with the dishonest purpose of frustrating rights, and
the sale is only by way of an eyewash. Unless the electricity supply
is made available, it would be impossible for any person purchasing
the property by way of statutory fiction, to make use of the
premises for industrial purpose. Therefore, when the Supply Code
prohibits to the consumer, who was previous owner and does not
create fetter on the right of a new consumer, who has purchased
property by way of statutory fiction, it would not be prima facie a
case to curtail right on the ground, as sought to be canvassed by
putting the condition to the fullest extent of depositing 100 of the
amount.

In
view of the above, the respondent electricity company is directed to
supply the electricity on condition that without prejudice to the
rights and contentions in the main Special Civil Application, and
subject to the outcome of the main Special Civil Application, the
applicant deposits 50 percent amount including Government tax of
Rs.84,07,970/- with the respondent
electricity company within a period of two weeks and files further
undertaking that in the event the petition is dismissed, or it is so
directed by this Court, he shall pay outstanding amount of the
previous owner within a period, as may be ordered by this Court in
the main Special Civil Application.

The
Civil Application stands disposed of accordingly.

Mr.

Pujara learned Counsel for the electricity company prayed that the
operation of this order be stayed for some time, so as to enable
respondent-Electricity Company to approach before the higher forum.

Considering
the facts and circumstances, it is only after two weeks, the
electricity is to be supplied, the said request is rejected.

(JAYANT PATEL, J.)

Suresh*

   

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