K. C. NINAN v. KERALA STATE ELECTRICITY BOARD & ORS.

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A whereas SICA is silent on the aspects of the supply of electricity to consumers. The principal subject matter of SICA is to provide ameliorative measures for reconstruction of sick companies, while the purpose of the 2003 Act is development of the electricity industry. Thus, the purpose of the two enactments is entirely different. The 2003 Act is a later enactment, and Section 175 specifically provides that the provisions B of the Act are in addition and not in derogation of any other law for the time being in force, including the SICA.

287Copy pinpoint287. In KSL & Industries Ltd v. Arihant Threads Ltd,106 a three-judge Bench of this Court was called upon to decide which enactment between the SICA and Recovery of Debts Due to Banks C and Financial Institutions Act, 1993107 would prevail over the other. The Court observed that although both the legislations are special laws in relation to their respective subject matters, SICA would prevail over the RDDB Act by virtue of the incorporation of a non-derogation clause in the latter. In the RDDB Act, Parliament had specifically provided that the RDDB Act shall be in addition to and not in derogation of other laws mentioned therein including SICA: “49. The term “not in derogation” clearly expresses the intention of Parliament not to detract from or abrogate the provisions of SICA in any way. This, in effect must mean that Parliament intended the proceedings under SICA for reconstruction of a sick company to go on and for that purpose further intended that all the other proceedings against the company and its properties should be stayed pending the process of reconstruction. While the term “proceedings” under Section 22 of SICA did not originally include the RDDB Act, which was not there in existence Section 22 covers proceedings under the RDDB Act.” (emphasis supplied)

288Copy pinpoint288. Similarly, Section 175 of the 2003 Act provides that the provisions of the Act are in addition and not in derogation of any other law for the time being in force. Therefore, by specifically providing that the 2003 Act shall be in addition to and not in derogation of any other laws for time being in force, the Parliament has preserved and give

106 (2015) 1 SCC 166 107 H “RDDB Act”

K. C. NINAN v. KERALA STATE ELECTRICITY BOARD & 767 ORS. [DR DHANANJAYA Y CHANDRACHUD, CJI]

precedence to the proceedings under SICA. Section 32 of SICA provides A an overriding effect to a scheme framed under it. Section 18 of the SICA mandates an operating agency such as BIFR to prepare a scheme providing for transfer of business, properties, assets, and liabilities of the sick industrial company on terms and conditions as may be specified in the scheme. B

289Copy pinpoint289. SICA is a special statute and Section 32 read with Section 18(8) of the SICA gives an overriding effect to the Scheme. The 1996 Rehabilitation Scheme and the 2006 Revised Rehabilitation Scheme bind the appellant, but override Clause 2(j) of the terms and conditions of supply. C

290Copy pinpoint290. Applying the above position of law to the facts of the present case, it is apparent that the respondent purchased ‘surplus land’ of NCSML in pursuance of the rehabilitation scheme framed by BIFR. When the respondent was given possession of the land in 2003, NCSML was a going concern as it continued to be operated by MDTLCIL. The relevant clauses of the sale deed expressly excluded the respondent D from the past dues of NCSML. In fact, the Clause 9 of the sale deed reiterated that NCSML would be responsible to pay any outstanding dues related to the land. Further, the 2006 Revised Rehabilitation Scheme solely puts the onus of clearance of electricity arrears on NCSML, while directing the appellant to release electricity connection to the respondent. E Thus, NCSML being the consumer, was obligated to clear the arrears of electricity pertaining to the said premises. The appellant could only recover dues from NCSML, since it was a going concern at the time when the respondent applied for supply of electricity. It is admittedly the case that the appellant did not institute any proceeding for recovery of dues from NCSML. This has been observed in the judgment dated 14 June 2010 of F the High Court: “Under these circumstances, no recovery was made by Respondent against NCSML. If no recovery were made against NCSML, the demand of dues against the Petitioner (respondent herein) which is the purchaser of portion of land owners by G NCSML is not sustainable.”

291Copy pinpoint291. The High Court has rightly observed that the appellant cannot selectively withhold electricity to the respondent under the guise of demand for past electricity arrears. The stance of the appellant is opposed H

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A to the rehabilitation scheme framed by the BIFR. The Revised Rehabilitation Scheme formulated by the BIFR will be binding on the appellant by virtue of Section 18(8) of SICA. According to the said provision, once a scheme is sanctioned, it shall not only bind the sick industrial company and the transferee company, but also creditors such as the appellant. The statutory provision is extracted below: B “18. Preparation and sanction of Schemes - (8) On and from the date of the coming into operation of the sanctioned scheme or any provision thereof, the scheme or such provision shall be binding on the sick industrial company and the transferee company or, as the case may be, the other company and also on the shareholders, creditors and guarantors and employees of the said companies.”

292Copy pinpoint292. On 20 March 2015, a two-judge Bench of this Court passed an interim order staying the operation of the impugned judgment in the following terms: “The impugned judgment and order dated 21.11.2014 passed by the High Court of Gujarat is stayed subject to Respondent No. 1 furnishing a bank guarantee of 50% of the total dues. It is made clear that the electricity will be supplied only on furnishing the aforesaid bank guarantee. Such of those purchasers who wish to pay the amount due to the petitioner are permitted to do so. The petitioner will consider the case on merits and take a decision on providing the electricity connection.” F

293Copy pinpoint293. We accordingly vacate the stay on the impugned judgment dated 21 November 2014. Any amount furnished by the respondent shall be refunded back. The appeal shall stand dismissed. Item 101.8: Paschim Gujarat Vij Company Limited v. Sarifaben Mehboobbhai Solanki, SLP (C) No. 13400/2018 G

294Copy pinpoint294. The electricity supply of Kanti Cotton Mills Pvt Ltd, the previous owner, was disconnected on 09 June 1981. The mill was deemed to be a ‘relief undertaking’ under Section 3 of the Bombay Relief Undertakings (Special Provisions) Act, 1958. In 1982, Gujarat State

K. C. NINAN v. KERALA STATE ELECTRICITY BOARD & 769 ORS. [DR DHANANJAYA Y CHANDRACHUD, CJI]

295Copy pinpoint295. On 23 May 2005, the appellant served a notice on JMIPL C demanding payment of Rs. 2.3 crores. On 05 September 2006, a Single Judge allowed the petition which was instituted by JMIPL by holding that the claim of the appellant for arrears of electricity dues, being in the nature of a money claim, was required to be lodged within 3 years, and was barred by limitation. The appeal was dismissed by the Division Bench D by a judgment dated 04 April 2014 on the ground that the appropriate remedy available to the appellant was to file a civil suit or get a garnishee order so that the purchaser would know that there is a liability on the property in question. On 16 December 2016, the High Court dismissed the review petition preferred by the appellant on the ground of delay. E

296Copy pinpoint296. The respondents purchased a small residential house from JMIPL in 2012. On 4 October 2014, the respondents applied for the grant of an electricity connection. Since the request was not acceded to, the respondent instituted a complaint before the Consumer Grievances Redressal Forum seeking a connection without insistence on the dues of the earlier owner as they had purchased the plot from JMIPL. The F forum disposed of the case in light of Clause 4.1.11 of the Electricity Supply Code, which was amended in 2010. The respondent approached the Electricity Ombudsman, who relied upon the previous order of the High Court to direct the appellant to supply electricity to the respondents by an order dated 30 March 2015. The appellants filed a Special Civil G Application before the High Court against the order of the Ombudsman. On 16 February 2016, the Single Judge of the High Court dismissed the application. The Division Bench of the High Court by judgment dated 8

108 “GSTC” 109 “JMIPL” H

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A September 2017 declined to interfere on the ground that a Special Leave Petition110 preferred before this Court against the order dated 4 April 2014 was dismissed.

297Copy pinpoint297. It is important to reiterate that the appellant had also denied an electricity connection to JMIPL, the predecessor-in-title of respondent. B However, JMIPL filed a petition under Article 226, which was allowed by a Single Judge of the High Court. The appellant filed a Letters Patent appeal, which was dismissed by the Division Bench of the High Court by a judgment dated 04 April 2014 on the ground of limitation. The Ombudsman, in its order dated 30 March 2015, based its decision on this judgment of the Division Bench. The judgment dated 04 April 2014 attained C finality. The right of the respondent to receive supply of electricity stood crystallised on the judgment attaining finality upon the dismissal of the Special Leave Petition filed by the appellant. Therefore, the order passed by the Ombudsman, and the subsequent orders passed by the High Court affirming the decision of the Ombudsman, do not suffer from any infirmity. D The impugned judgment of the High Court is upheld for that reason. The appeal shall stand dismissed. Item 101.16: Torrent Power Ltd. v. M/s Abhisar Developers, SLP(C) 9092-9094 of 2013

298Copy pinpoint298. On 01 September 1986, New Gujarat Synthetic Company, E the previous owner, went into liquidation. On 12 September 1986, the electricity connection to the premises of the previous owner was disconnected for non-payment of dues amounting to Rs. 77 lakhs. On 12 October 2006, a public auction was conducted of the immovable properties of the previous owner, including their premises. These were F purchased by Star Associates and conveyed to Abhisar Developers, the respondent herein.

299Copy pinpoint299. On 28 December 2006, the respondent-purchaser applied for a new connection for the premises. However, the appellant called upon the respondent to clear the outstanding dues of the premises. In G 2007, the respondent filed a writ petition before the High Court of Gujarat praying for new connection without payment of the arrears. In 2010, the High Court allowed the petition and directed the Licensee to provide the connection. On 3 December 2012, the Division Bench of the High Court

H 110 Diary No. 23261 of 2017

K. C. NINAN v. KERALA STATE ELECTRICITY BOARD & 771 ORS. [DR DHANANJAYA Y CHANDRACHUD, CJI]

held that the Clause 4.1.11 of the Gujarat Electricity Supply Code, as amended in 2010, is ultra vires the provisions of the 2003 Act.

300Copy pinpoint300. The appellant has referred to Clauses 4.1.16, 4.8.1, and 4.8.4 of the Electricity Supply Code to argue that the auction-purchaser cannot deny knowledge of the requirement to clear the outstanding dues of the premises. In response, the auction-purchaser has submitted that there was no statutory provision at the relevant time requiring the payment of the dues of the previous owner from the subsequent owner as a condition precedent for providing for a fresh connection.

301Copy pinpoint301. The relevant Clauses 4.1.16, 4.8.1, and 4.8.4 of the 2005 Electricity Supply Code are extracted hereunder: C “4.1.16 The Distribution Licensee shall give no dues certificate to consumer on his request to avoid any possibilities of pending dues of previous owner while purchasing new house/ premises. [...] D 4.8.1 The Consumer shall not without prior consent in writing of the Distribution Licensee assign, transfer or part with the benefit of the Agreement executed with the Distribution Licensee nor shall part with or create any partial or separate interest there under in any manner. Transfer of service connection will be effected on application in case the registered Consumer is dead E or if the ownership or occupation of the property has changed or transferred. In all cases of such transfers, the arrears of every description shall be paid in full together with transfer fee as prescribed in relevant GERC Regulations. [...] F 4.8.4 Where Premises to which electricity is supplied by Licensee is transferred to transferee and the transferee does not get service connection in the Premises transferred to his name, and continues to use the service connection in previous name, the transferee shall be responsible for payment of running energy bills as well as G unpaid dues of energy bills and other amounts relating to the service connection. The dues to the Distribution Licensee shall be payable on demand, in default of which the supply to the Premises may be disconnected, subject to the provisions of the Acts, rules, and regulations for the time being in force. “ H

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302Copy pinpoint302. Clause 4.1.16 of the Gujarat Electricity Supply Code obligated the distribution licensee to provide no-dues certificate when requested by a consumer “to avoid any possibilities of pending dues of the previous owner while purchasing new house/premises.” This is only a procedural provision and does not per se impose any obligation on the subsequent owner of the premises. The term “consumer” will not bring B an auction-purchaser within the ambit of Clause 4.1.16 as an auction- purchaser does not become a consumer before entering into an agreement with the distribution licensee.

303Copy pinpoint303. According to Clause 4.8.1, a consumer shall not transfer a service connection without the prior consent of the distribution licensee. C It further provides that transfer of a service connection will be effected on application in case the registered consumer is dead or if the ownership or occupation of property has changed or been transferred. In case of a transfer, the clause provides that arrears of every description shall be paid in full together with the transfer fee. However, the said provision D only applies in situations where there has been a transfer of a service connection. In the facts of the present case, we are dealing with a situation where the auction-purchaser applied for a new connection of electricity to the premises. Therefore, Clause 4.8.1 will not be applicable to the facts of the present case.

304Copy pinpoint304. Clause 4.8.4 provides that a transferee of premises would be liable for the unpaid dues of energy bills of the defaulter transferor only if they continue to use the service connection in the previous name without transferring to their name. The said clause is only applicable where a transferee applies for a transfer of connection, and not where a transferee applies for a new power connection in their own name. F

305Copy pinpoint305. In the present matter, from the perusal of facts, it is evident that the respondent applied for a fresh electricity connection for the premises on 28 December 2006. Therefore, on the date of the submission of the application for electricity by the respondent, the unamended Clause 4.1.11 of the Gujarat Electricity Supply Code was in force, according to G which only the dues of the applicant to the distribution licensee had to be cleared for a new connection or reconnection of electric supply. There was no statutory provision requiring the auction purchasers to clear the arrears of the previous owner as a condition precedent for getting a fresh connection. H

K. C. NINAN v. KERALA STATE ELECTRICITY BOARD & 773 ORS. [DR DHANANJAYA Y CHANDRACHUD, CJI]

306Copy pinpoint306. It was only in 2010 that clause 4.1.11 of the said Electricity A Supply Code was amended which required the subsequent owner of the premises to clear the dues of the previous owner as a condition precedent for receiving a new electricity connection. Thus, at the time when the respondent applied for a fresh connection of electric supply, there was no existing provision requiring the applicant of a new connection to clear B the dues of the previous owner linked to the premises. Therefore, the judgment dated 3 December 2012 of the High Court has to be upheld. The appeal shall stand dismissed. IV. Assam

307Copy pinpoint307. The Assam Electricity Regulatory Commission framed the C AERC Supply Code on 30 August 2004 in exercise of its power under Section 50 of the 2003 Act to provide for recovery of electricity charges. Clause 3.6 deals with requisition of supply. Clause 3.6.4 is extracted below: “3.6.4 In case of a person occupying a new property, it will be the obligation of that person to check the bills for the previous months or, in case of disconnected supply, the amount due as per the licensee’s records immediately before his occupation and ensure that all outstanding electricity dues as specified in the bills subject to limitation as per sub-section (2) of Section 56 of the Act are duly paid up and discharged. The licensee shall be obliged to issue a certificate of the amount outstanding from the connection in such premises on request made by such person.” The impugned clause obligates a new occupier of a premises to check the bills for previous months and ensure that all the outstanding amounts are duly paid up and discharged. F Item 101.15: Carbon Resources v. Assam Electricity Regulatory Commission; SLP(C) No. 24502 of 2010

308Copy pinpoint308. The previous owner, Eastern Steel and Alloys Company Ltd, had electricity dues pending for the period 1988-1989, due to which G electricity supply was disconnected in 1992. The Assam State Electricity Board111 filed a money suit before the District Judge against the previous owner, which was decreed in its favour for Rs 2.07 crore on 24 February

111 “ASEB” H

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A 1997. On account of the liabilities due to UCO Bank, a warrant of attachment was levied on 30 June 2004.

309Copy pinpoint309. In 2002, UCO Bank preferred an application against the previous owner before the Debt Recovery Tribunal. On 16 March 2007, the Recovery Officer of the Debt Recovery Tribunal, Guwahati issued an auction sale notice for the land in question. Clause 7 of the notice of auction sale stipulated that the properties were being sold on “as is where is” basis and subject to other conditions prescribed in the Second Schedule of the Income Tax Act, 1961 and Rules made thereunder. The appellant was the highest bidder and was declared as an auction-purchaser on 20 February 2008. On 24 March 2008, a sale certificate was issued in favour of the appellant and possession was handed over to the appellant by UCO Bank on 27 March 2008. The Recovery Officer confirmed the auction sale in favor of the appellant, who took over the possession of the property on 27 March 2008. On 21 January 2009, the appellant applied for a high-tension industries electricity connection, but ASEB denied it due to pending arrears of the previous owner.

310Copy pinpoint310. Therefore, the appellant filed a writ petition before the Gauhati High Court seeking: (i) an electricity connection without having to pay the arrears of the previous owner; and (ii) challenging the vires of Regulation No. 3.6.4 of the AERC Electricity Supply Code. On 2 June E 2010, a Division Bench of the High Court delivered a judgment dismissing the petition.

311Copy pinpoint311. The appellant has drawn the attention of this Court to the fact that the respondent had filed a suit against the previous consumer, in which a decree was passed. The appellant submits that recovery of arrears of the previous owner could be effected in execution of the decree. From the perusal of the facts, it is true that the respondent had already instituted a money suit against the previous consumer and obtained a decree. However, the respondent has stated before the High Court that the execution could not be carried out successfully. In these proceedings, we are not concerned with the validity of the execution proceedings initiated by the respondent against the previous owner.

312Copy pinpoint312. The respondent has submitted that before purchasing the premises, the appellant was required to undergo due-diligence and verify that there were no electricity dues in relation to the premises. The respondent has also questioned the validity of the sale in favor of the appellant on the ground that there was a subsisting money decree in

K. C. NINAN v. KERALA STATE ELECTRICITY BOARD & 775 ORS. [DR DHANANJAYA Y CHANDRACHUD, CJI]

favour of the respondent and the premises were under Court attachment. A The respondent also referred to a State Government order dated 29 November 2004 directing Deputy Commissioners and Sub-divisional Officers to not issue sale/ transfer permission of land without clearance of the electricity dues. On 26 June 2006, the electricity distribution companies also issued a public notice requiring new consumers to clear B the dues of the previous consumer. The relevant extract of the said public notice is hereunder: “It is observed that some electricity consumers having outstanding dues payable against energy consumption are trying to sale or lease out their premises (including land and building) without clearing the electricity dues. C

Govt. of Assam has already prohibited such transfer of premises and made it mandatory to obtain electricity dues clearance certificate from the concerned officers before applying for permission of transfer. D All prospective buyers or lessee are hereby requested to satisfy themselves regarding clearance of electricity dues before taking over the possession of such premises. In the event of non discharge of liabilities of electricity dues by the previous owner, the purchaser/ lessee will be liable to clear the said dues before power supply provided to them in accordance with provision of Terms and Condition regulation notified by Assam Electricity Regulatory Commission.”

313Copy pinpoint313. Therefore, it has been contended by the respondent that the appellants were put to sufficient notice regarding the requirement of clearing dues before purchasing the property. In the present proceedings, the validity of the auction sale of the premises to the appellant does not arise for consideration, as it is a matter to be decided in separate proceedings. We are only concerned with whether the appellant, being a new owner of the premises, is liable to clear the dues of the previous consumer before getting a supply of electricity. G

314Copy pinpoint314. By the impugned judgment dated 2 June 2010, the High Court has upheld the validity of Regulation 3.6.4 of the AERC Electricity Supply Code. It held that the stipulation contained in the said regulation is reasonable and within the ambit of the powers conferred by Section 50 of the 2003 Act. We are of the opinion that the impugned clause is H

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A reasonable and consistent with the provisions of the 2003 Act. Accordingly, the appellant was obligated to check the bills for previous months and ensure that all the outstanding amounts are duly paid up and discharged. Therefore, we find no merit in the challenge to the decision of the High Court. However, to balance the interests of parties, we make it clear that if any arrears of electricity are received from the previous owner, the amount shall be adjusted with the power bills of the appellant. V. West Bengal

315Copy pinpoint315. In West Bengal, the WB Electricity Supply Codehave been enacted in 2012 under the 2003 Act. The relevant regulations - Clause 3.4.2, 4.6.1 and 4.6.4 - are set out below: “3.4.2. The licensee shall be eligible to recover from a new and subsequent consumer(s) the dues of the previous and defaulting consumers in respect of the same premises only if a nexus between the previous and the defaulting consumer(s) and the new consumer(s) in respect of the same premises is proved. The onus of proving a nexus, if claimed by a licensee, shall lie on the licensee.” 4.6.1. If the power supply to any consumer remains disconnected continuously for a period of one hundred and eighty days where the disconnection has been effected in compliance with any of the provisions of the Act or Regulations, the agreement of the licensee with the consumer for supply of electricity shall be deemed to have been terminated with consequential effect on expiry of the said period of one hundred and eighty days. This will be without prejudice to such other action or the claim that may arise from the disconnection of supply or related issues therefor. On termination of agreement, the licensee shall have the right to remove the service line and other installations through which electricity is supplied to the consumer.” G “4.6.4. Notwithstanding anything contained contrary elsewhere in these Regulations where deemed termination of agreement has taken place, then on the basis of application of any consumer new service connection can only be provided in the same premises if the outstanding dues against the deemed terminated consumer is cleared along with the late payment surcharge.” H

K. C. NINAN v. KERALA STATE ELECTRICITY BOARD & 777 ORS. [DR DHANANJAYA Y CHANDRACHUD, CJI]

316Copy pinpoint316. Under Regulation 3.4.2 of the WB Electricity Supply Code, A the licensee is entitled to recover the outstanding dues of the previous owner from the new and subsequent owner if there is a nexus between the previous owner and the new consumer. Regulation 4.6.1 provides that there shall be a deemed termination of agreement if the power supply to any consumer remains disconnected for a continuous period of B 180 days. Regulation 4.6.4 overrides other provisions of the WB Electricity Supply Code as it contains a non-obstante clause. Under Regulation 4.6.4, a new consumer can be given a service connection only if the outstanding dues against the same premises is cleared along with late payment surcharge. Item 101.18: Damodar Valley Corporation v. Sree Ramdoot C Rollers Private; SLP (C) No. 15723 of 2020

317Copy pinpoint317. On 30 June 2012, the appellant electricity utility, Damodar Valley Corporation, and Capricorn Ispat Udyog Private Limited, the previous owner, entered into an agreement for supply of electrical energy. The bank guarantees furnished by the respondent expired on 4 June D

2014. The electricity connection to the previous owner was disconnected on 21 September 2016 for default in payment of electricity dues to the suit premises. On 14 August 2018, the State Bank of India advertised the property for e-auction under SARFAESI Act for default of dues on “as is where is basis”. The relevant terms and condition of e-auction E sale are as follows:

1. “E-auction is being held on AS IS WHERE IS and will be conducted online. ***

2. [To] the best of knowledge and information of the authorised officer there is no encumbrance of the properties. However, F the intending bidders should make their own independent enquiries regarding the encumbrance title of properties put on auction and claim rights dies affecting the properties [prior] to submitting their bid. The E-auction advertisement does not constitute and will not be deemed to constitute G any commitment or any representation of the bank. The properties is being sold with all the existing and future encumbrance whether known or unknown to the bank and authorised officer secured creditor shall not be responsible in any way for the third party claims, rights, dues. H ***

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A 7. It shall be the responsibility of the interested bidders to inspect and satisfy themselves about the properties before submission of the bid.” Clause 1 of the terms and conditions provided that the e-auction was being held on an “as is where is basis”. Clause 2 provided that the property was being sold with all present and future encumbrances, whether known or unknown to the bank. Clause 7 provided that it was the responsibility of interested bidders to inspect and satisfy themselves about the properties before submission of the bid.

318Copy pinpoint318. On 31 August 2018, the assets of the previous owner were taken over by Magnum Tradelink Private Limited through an e-auction. The registration of property was done in the name of Shree Ramdoot Rollers Private Limited, who is the respondent herein. On 04 October 2018, the respondent filed an application seeking a new connection from the appellant. When the appellant refused, the respondent filed a writ petition before the High Court of Calcutta. On 17 April 2019, the Single D Judge allowed the petition and ordered the appellant to process the respondent’s application within a period of three weeks. However, by its letter dated 10 May 2019 the appellant refused to grant a connection in view of the electricity dues of Rs. 22.05 crores payable by the erstwhile owner in respect of premises. The respondent again approached the E High Court seeking a direction for the supply of electricity to their premises. On 19 June 2019, the Single Judge of the High Court allowed the Writ Petition and directed the grant of an electricity connection to the respondent. The Division Bench by a judgment dated 24 April 2020 dismissed the writ appeal and upheld the decision of the Single Judge.

319Copy pinpoint319. In the impugned judgment dated 24 April 2020, the High Court’s interpretation largely focused on the phrase “any consumer” contained in Regulation 4.6.4. Under Regulation 4.6.4, a new consumer can be given service connection only if the outstanding dues against the same premises are cleared along with a late payment surcharge. The Court referred to Isha Marbles (supra) to hold that the definition of G “consumer” contained in Section 2(15) does not include an auction- purchaser. However, the Court held that it is possible to bring an auction- purchaser within the ambit of Regulation 4.6.4 if: (i) the distribution licensee establishes the fact that the premises concerned were connected to the works of the distribution licensee; (ii) for the purpose of receiving electricity; and (iii) in such a manner that the supply of electricity can be resumed by ‘simply putting on a switch’.

K. C. NINAN v. KERALA STATE ELECTRICITY BOARD & 779 ORS. [DR DHANANJAYA Y CHANDRACHUD, CJI]

320Copy pinpoint320. The appellant has drawn attention to the fact that the supply of electricity to the premises was disconnected on 21 September 2016. Therefore, the appellant submits that on the date of the sale of the premises to the respondent, that is 31 August 2018, the supply of electricity was disconnected for more than 180 days. Hence, it is the appellant’s contention that Regulation 4.6.1 is applicable and there is a deemed termination of agreement. It has been further contended that Regulation 4.6.4 has an overriding effect as it begins with a non-obstante clause. The respondent, on the contrary, has argued that Regulation 3.4.2 would be applicable in the present case. It has been argued that Regulation 4.6.4, despite having a non-obstante clause, has no bearing on the operation of Regulation 3.4.2. C

321Copy pinpoint321. The supply of electricity was disconnected on 21 September

An auction-purchaser, such as the respondent, cannot be termed as a “consumer” unless an agreement was entered into with the distribution licensee. Therefore, we find no fault with the reasoning of the High Court. G

322Copy pinpoint322. Consequently, we uphold the impugned judgment of the High Court. The appeal shall stand dismissed. H. Equity and Fairness

323Copy pinpoint323. This Court is entrusted with the constitutional authority under Article 142 of the Constitution to render complete justice. Where H

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A appropriate, this Court has to take recourse to its constitutional power under Article 142 to bring about substantial justice.

324Copy pinpoint324. Since the decision of this Court in Isha Marbles (supra), the law as regards the liability of the subsequent owner for the payment of arrears of the electricity dues of the previous owner has been in flux. B Petitions challenging the decisions of different Electric Utilities were filed as early as 2001. The orders of the High Courts had the effect of either directing the Electric Utilities to grant electricity connections to auction purchasers without insisting on payment of outstanding electricity dues, or directing the auction purchasers to comply with the conditions of supply or Electricity Supply Code, as the case may be. In some of the C nineteen cases, this Court while granting leave passed interim orders. The legal issue of whether electricity dues constitute a charge on the property so far as the transferor and the transferee are concerned was referred to a larger bench by an order of this Court way back in 2006. The litigation in this batch of cases remained pending.

325Copy pinpoint325. In the specific cases before us, where this Court has upheld the validity of the subordinate regulations (Conditions of Supply or Electricity Supply Code, as the case may be) and has held the relevant regulation to be applicable to the factual matrix, the auction purchasers would be liable to pay the outstanding dues of the previous consumer. E On behalf of the Electric Utilities, claims have been made for interest on such arrears.

326Copy pinpoint326. This Court must bear in mind the element of public interest in balancing the equities, particularly, at this stage where more than two decades have passed in litigation since the issue first arose. The 2003 F Act was enacted to promote the development of the electricity industry, while protecting the interest of consumers. It must be kept in mind that many of the auction-purchasers are commercial entities who had purchased the premises for commercial ventures. Electricity being a necessity for operation of any commercial venture, denial of electricity connections to the auction-purchasers for an indefinite period of time G resulted in loss of business. The delay in the court proceedings should not be to the further detriment of the litigants.

327Copy pinpoint327. Taking all facts and circumstances into consideration, including the lapse of more than two decades since the appeals were filed before this Court and the equities arising in favour of one party or the other, we H

K. C. NINAN v. KERALA STATE ELECTRICITY BOARD & 781 ORS. [DR DHANANJAYA Y CHANDRACHUD, CJI]

direct the Electric Utilities to waive the outstanding interest accrued on A the principal dues from the date of application for supply of electricity by the auction purchasers. I.Conclusions

328Copy pinpoint328. The conclusions are summarised below: B a. The duty to supply electricity under Section 43 of the 2003 Act is not absolute, and is subject to the such charges and compliances stipulated by the Electric Utilities as part of the application for supply of electricity; b. The duty to supply electricity under Section 43 is with C respect to the owner or occupier of the premises. The 2003 Act contemplates a synergy between the consumer and premises. Under Section 43, when electricity is supplied, the owner or occupier becomes a consumer only with respect to those particular premises for which electricity is sought and provided by the Electric Utilities; D c. For an application to be considered as a ‘reconnection’, the applicant has to seek supply of electricity with respect to the same premises for which electricity was already provided. Even if the consumer is the same, but the premises are different, it will be considered as a fresh E connection and not a reconnection; d. A condition of supply enacted under Section 49 of the 1948 Act requiring the new owner of the premises to clear the electricity arrears of the previous owner as a precondition to availing electricity supply will have a F statutory character; e. The scope of the regulatory powers of the State Commission under Section 50 of the 2003 Act is wide enough to stipulate conditions for recovery of electricity arrears of previous owners from new or subsequent G owners; f. The Electricity Supply Code providing for recoupment of electricity dues of a previous consumer from a new owner have a reasonable nexus with the objects of the 2003 Act; H

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A g. The rule making power contained under Section 181 read with Section 50 of the 2003 Act is wide enough to enable the regulatory commission to provide for a statutory charge in the absence of a provision in the plenary statute providing for creation of such a charge; B h. The power to initiate recovery proceedings by filing a suit against the defaulting consumer is independent of the power to disconnect electrical supply as a means of recovery under Section 56 of the 2003 Act; i. The implication of the expression “as is where is” basis is C that every intending bidder isput on notice that the seller does not undertake responsibility in respect of the property offered for sale with regard to any liability for the payment of dues, like service charges, electricity dues for power connection, and taxes of the local authorities; and

D j. In the exercise of the jurisdiction under Article 142 of the Constitution, the Electric Utilities have been directed in the facts of cases before us to waive the outstanding interest accrued on the principal dues from the date of application for supply of electricity by the auction purchasers. E

329Copy pinpoint329. Pending applications, if any, shall stand disposed.

Bibhuti Bhushan Bose Appeals disposed of. (Assisted by : Shubhanshu Das, LCRA)