Case Note & Summary
The dispute arose between Paschimanchal Vidyut Vitran Nigam Ltd. and M/s. DVS Steels & Alloys Pvt. Ltd. regarding the recovery of electricity dues. The appellant, a successor of the Uttar Pradesh State Electricity Board, raised supplementary bills against the third respondent, a consumer, which led to civil suits and an injunction against recovery. The third respondent later subdivided its industrial plot and sold one plot to the first respondent, who sought electricity supply but was required to pay the third respondent's arrears. The first respondent complied and paid Rs.8,63,451/- but later sought a refund, arguing that it was not liable for the previous dues. The appellant refused, citing the right to recover dues from subsequent occupiers. The first respondent filed a writ petition, which the High Court allowed, directing a refund. The Supreme Court examined whether the appellant could recover dues from the first respondent and whether the first respondent was entitled to a refund. The court noted that while a distributor can demand clearance of dues before providing a connection, the first respondent's payment was made voluntarily before a regulatory order that prohibited such demands. The court concluded that the first respondent could not claim a refund based on the subsequent order and allowed the appeal, setting aside the High Court's order. The appellant was directed to refund the amount only if the third respondent was found not liable for the dues.
Headnote
A) Electricity Law - Recovery of Dues - Liability of Subsequent Purchaser - Electricity Act, 2003, Section Not Mentioned - The court held that a distributor can stipulate that arrears due for electricity supplied to a premises must be cleared before providing a new connection, as this is not unreasonable or arbitrary. This ensures that the distributor can recover dues and prevents unscrupulous consumers from evading payment by selling properties. (Paras 9-11). B) Electricity Law - Refund of Payment - Conditions for Refund - Electricity Act, 2003, Section Not Mentioned - The court ruled that the first respondent, having voluntarily paid dues to obtain a connection, cannot claim a refund based on a subsequent order from the Commission that did not direct refunds for amounts already paid. The appellant must refund the amount if the third respondent is found not liable for the dues. (Paras 12-14).
Issue of Consideration
Whether the supplier can recover the electricity dues from the purchaser of a sub-divided plot?
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's order, and dismissed the writ petition of the first respondent. The appellant was directed to refund the amount only if the third respondent was found not liable for the dues.
Law Points
- Electricity supply
- recovery of dues
- privity of contract
- bank guarantee
- statutory regulations
