[E-Auction "As Is Where Is"] Purchaser has to clear past electricity dues for connection, cannot claim ignorance: Supreme Court

The SC on June 01, 2020 {TELANGANA STATE SOUTHERN POWER DISTRIBUTION COMPANY LIMITED & ANR. vs M/S. SRIGDHAA BEVERAGES} held 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.

It was held by the Bench, comprising of Justice Sanjay Kishan Kaul & Justice K.M. Joseph, that 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 doubt that the liability to pay electricity dues exists on the respondent (purchaser).

In the present case, the moot point of law, which arose for consideration before the SC, was whether the liability towards previous electricity dues of the last owner could be mulled on to the respondent.

The SC held that as an auction purchaser bidding in an “as is where is, whatever there is and without recourse basis”, it was for the respondent to have inspected the premises and made inquiries about the dues in all respects.

The SC distinguished the earlier judgments, in which, the Court did not bind the purchase for payment of old electricity dues, in view of peculiar facts of those case, namely: Isha Marbles v. Bihar State Electricity Board & Anr. (1995) 2 SCC 648; Haryana State Electricity Board v. Hanuman Rice Mills, Dhanauri & Ors. (2010) 9 SCC 145 (2 Judge Bench); Special Officer, Commerce, North Eastern Electricity Supply Company of Orissa (NESCO) v. Raghunath Paper Mills Private Limited & Anr. (2012) 13 SCC 479 (2 Judge Bench); Southern Power Distribution Company of Telangana Limited (through its CMD) & Ors. v. Gopal Agarwal & Ors. (2018) 12 SCC 644.

It was further held that 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.

In view of the aforesaid, the SC held that the impugned orders cannot be sustained, and were 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. The appeal was accordingly allowed by the SC of power distribution Company.