K.N.Sakrappa @APPELLANT@Hash Bangalore Electricity Supply Company Ltd and Ors

The petitioner has challenged the demand notice dated 26.12.2014 issued by the third respondent marked at Annexure-A to the writ petition.

The petitioner is running a small scale agro industry in Challekere and for the purpose of his business he applied for supply of power from the

respondent company. Originally one M/s.Hari Industries and M/s. Renuka Enterprises were the owners of Sy.No.29/1B3, K.No.344, measuring 1-00

acre and Sy.No.29/1B measuring 2-00 acres of Nagaramgere, Bangalore Road, Challakere, have availed the loan from Karnataka State Financial

Corporation [KSFC] for running their business. The KSFC had brought the properties for auction to realize the dues, which remained unpaid. The

petitioner has purchased the properties in the auction conducted by the KSFC. The KSFC has accepted the offer made by the petitioner and has

issued the sale communication to the petitioner on 20.03.2006. Subsequently, the KSFC has executed the sale deed on 05.04.2006. In the condition of

sale as well as the sale deed, it was agreed by the petitioner to pay all taxes, electricity charges, water consumption charges or any other

taxes/charges [including arrears] regularly to the concerned agencies or authorities or corporation or boards and get the khata transferred in to his

name. Based on the same, respondent No.3 has issued the demand notices calling upon the petitioner to pay the arrears of electricity charges. Hence,

this writ petition.

Learned counsel Sri.B.R.Satenahalli appearing for the petitioner would contend that the petitioner is not liable to pay the electricity charges as

demanded, which charges are pertaining to the erstwhile defaulter since he is the auction purchaser from the State Financial Corporation (SFC) under

Section 29 of the SFC Act, 1951. Learned counsel placed reliance on the following judgments in support of his contention:

ISHA MARBLES V/S. BIHAR ELECTRICITY BOARD AND ANOTHER reported in [1995] 2 SCC 648;

AHMEDABAD ELECTRICITY CO., LTD., V/S GUJARAT INNS PRIVATE LTD AND OTHERS reported in [2004] 3 SCC 587;

SPECIAL OFFICER COMMERCE, NESCO AND ANOTHER V/S. RAGHUNATH PAPER MILLS PRIVATE LIMITED AND ANOTHER

reported in [2012] 13 SCC 479.

It is thus submitted that in case of fresh connection as in the present case, thought the premises is the same, the auction purchaser cannot be held

liable to clear the arrears incurred by the previous owners in respect or electricity supply to the premises.

Learned counsel Sri.G.C.Shanmukha, appearing for the respondents placing reliance on the Regulation 4.09 (iv) of the Conditions of Supply of

Electricity of Distribution Licensees in the State of Karnataka (‘Regulations’ for short), submitted that the licensee is empowered to collect the

outstanding arrears in respect of the said premises for which the power supply agreement has been terminated from such person who desires to have

electricity to the said premises, before connection is given. Reliance is also placed on the sale deed executed by the KSFC marked at Annexure-R2 to

the statement of objections to contend that the petitioner shall be liable to pay all taxes, electricity charges, water consumption charges or any other

taxes/charges [including arrears] regularly to the concerned agencies or authorities or corporation or boards and get the khata transferred to his name.

Learned counsel referring to the judgment of this Court in W.P.No.5007/2005 wherein identical issue was considered, argued that in view of the

statutory regulation 4.09 (iv) of the Regulations and the specific clause of the sale deed executed by the KSFC in favour of the petitioner, petitioner is

liable to make the payment towards the arrears of power supply charges. It is also contended that the said judgment of this Court in the case of

B.K.SYED ZAKIR V/S. THE BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED AND OTHERS, reported in W.P.No.5007/2005

(DD 24.02.2005) has been confirmed by the Division Bench of this Court in Writ Appeal No.2499/2005 and accordingly seeks for rejection of the writ

petition.

I have given my anxious consideration to the arguments advanced by the learned counsel for the parties and perused the material on record.

Before adverting to the rival arguments addressed by the learned counsel for the respective parties, it is profitable to collate the legal principles

enunciated by the Hon'ble Apex Court as well as this Court in terms of the judgment referred to, by the learned counsel appearing for the parties.

In the case of ISHA MARBLES supra, the Hon’ble Court while considering the case where the Bihar Financial Corporation sanctioned the

loan to M/s. Neo Chemicals and Metal Products (P) Ltd., for setting up a unit for manufacture of Graphite Beneficiation, wherein for non-payment of

electricity bills, the electricity was disconnected, in order to secure the loan advanced to M/s. Neo Chemicals and Metal Products (P) Ltd., the

properties were sought to be sold under Section 29 of the State Corporation Act, held that the appellant (therein) was the highest bidder and

accordingly the properties were sold in favour for the appellant. Electricity Board informed the appellant that it was unable to restore the electricity

supply as its dues was not been paid either by the consumer or by the subsequent occupant of the said premises, accordingly, demand made on the

auction purchaser to clear the arrears of electricity charges for providing the fresh connection would not be countenanced. This judgment was

rendered after noticing the Bihar State Electricity Board Regulations where there was no provisions to make such claim, it was held that law as it

stands is inadequate to enforce the liability of the previous contract/occupier.

In the case of AHMEDABAD ELECTRICITY CO., LTD., supra, the auction purchaser M/s. Gujarat Inns Private Limited and others sought for

fresh connections stating that they have no objection if their connections are treated as fresh connections given on the dates on which the supply was

restored to the premises. The previous owners of the properties were in arrears towards the power supply charges. The electricity Board insisted that

on clearance of the previous arrears out standing, the fresh connection can be given. In that context, it was held that in case of fresh connection,

though the premises is the same, the auction purchaser cannot be held liable to clear the arrears by the previous owners in respect of power supply in

the premises in the absence of there being a specific statutory provision in this regard.

In the case of SPECIAL OFFICER COMMERCE, supra, respondent No.1 Raghunath Paper Mills had purchased the unit from the Official

Liquidator and the sale was confirmed on payment of the sale consideration. After taking over the possession on as is where is basis, the auction

purchase applied for fresh connection for supply of energy. The Electricity Board refused to provide power supply unless outstanding dues for the

electricity charges by the previous owner was cleared. On challenge to the said demand, the Hon'ble Apex Court held that the specific factual details

regarding the position of auction purchaser who purchased the said premises under Court Auction Sale from the Official Liquidator on “as is where

is basis†and in the light of the Regulations quoted therein, particularly, sub-clause 10(b) of Regulation 13, held that request was not for the transfer

from the previous owner to the purchaser, on the other hand, it was a request for a fresh connection for the unit of the respondent therein.

In the case of B.K.SYED ZAKIR, supra, the Co-ordinate Bench of this Court while analyzing an identical issue, distinguished the judgment of the

Hon'ble Apex Court in the light of the specific statutory Regulations provided under the Regulations enabling the respondents to claim the arrears of

electricity charges relating to the premises this Court has to refer to the sale deed executed by the KSFC which is in all respects identical to the sale

deed in the present case executed by the KSFC. Thus, this Court held that the petitioner cannot have any grievance whatsoever, because he has

purchased the property subject to the payment of electricity arrears and it is made explicitly clear by insertion of a clause in the sale deed. Having

accepted the liability to discharge the arrears due to KEB, it is not open to the petitioner to contend before this Court in the absence of mutuality

between him and the KEB, the KEB has no right to enforce the said claim. This judgment has been affirmed by the Division Bench of this Court in

Writ Appeal No.2499/2005.

In the light of these legal propositions, the factual aspects of the case has been examined. It is not in doubt that the judgment of this Court in

W.P.No.5007/2005 is squarely applicable to the facts of the present case. In the present case, Regulations No.4.09 (iv) of the Regulations is

applicable, which reads thus:

“iv) If any person desires to have electricity for a premises for which the power supply Agreement has been terminated (whether the service line

is dismantled or not) he shall be treated as a fresh Applicant and the Licensee shall collect the outstanding arrears in respect of the said premises from

such person before connection is given.â€​

The specific clause of the sale deed executed by the KSFC in favour of the petitioner reads thus:

“That in consideration of the receipt of the said sum of Rs.11,70,000/- [Rupees Eleven Lakhs Seventy Thousand Only] the receipt of which the

vendors, hereby acknowledge and the vendors, hereby transfer and convey all its rights, title and interest in the schedule property to the purchaser, its,

assigns and successors in interest to hold and enjoy the same forever absolutely as absolute owner thereof. That the purchaser shall pay all taxes,

electricity charges, water consumption charges or any other taxes/charges [including arrears] regularly to the concerned agencies or authorities or

Corporation or boards and get the khata transferred into his name.â€​

A reading of the Regulations as well as the specific clause explicitly provided in the sale deed and in the light of the judgments referred to above, it

is clear that the petitioner is entitled to discharge arrears of electricity charges in respect of premises purchased by him, if he is desirous to have

electricity for that premises. Hence, the writ petition is bereft of any merit, stands dismissed.

However, the petitioner is at liberty to move before the respondents to seek for the 99HP connection, subject to the payment of the arrears.