Case Note & Summary
The dispute arose between a distributing company and a purchaser of an electricity-consuming undertaking regarding the imposition of past dues as a condition for a fresh electricity connection. The appellant, Dakshin Haryana Bijli Vitran Nigam Ltd, disconnected power to M/s. L.L.C. Steels Pvt. Ltd. due to non-payment of dues amounting to Rs.64,23,695/-. Following the takeover of the undertaking by the Financial Corporation and its subsequent sale to the first respondent, the appellant introduced a new term in its Terms and Conditions of Supply on 27.11.2001, requiring new consumers to clear any outstanding dues of previous consumers. The first respondent applied for a connection on 1.1.2002 but was denied due to outstanding dues from the previous consumer. The first respondent filed a civil suit and a writ petition challenging the validity of the new condition. The High Court ruled in favor of the first respondent, stating that the condition could not apply retroactively. The Supreme Court, however, found that the High Court did not properly consider the statutory basis for the condition and the implications of the new clause. The court emphasized that the first respondent's application for a connection was governed by the amended terms, and thus the appellant was entitled to enforce the condition. The Supreme Court set aside the High Court's judgment and remitted the case for fresh consideration, allowing the first respondent to amend its writ petition. The court also directed the first respondent to deposit Rs.25 lakhs as a condition for maintaining the connection until the writ petition was resolved, with provisions for refunding the amount depending on the outcome of the case.
Headnote
A) Electricity Law - Terms and Conditions of Supply - Validity of Clause 21A - Electricity (Supply) Act, 1948, Section 49 - The court examined the validity of a condition requiring a new consumer to clear past dues of the previous consumer before receiving a fresh connection. It held that the condition was valid and applicable to the respondent, as the application for connection was made after the amendment was incorporated (Paras 9-10).
Issue of Consideration
Whether the appellant could impose a condition for clearing past dues of a previous consumer as a prerequisite for granting a fresh electricity connection to the respondent.
Final Decision
The Supreme Court set aside the judgments of the High Court and remitted the writ petition for fresh consideration, allowing the first respondent to amend its petition. The court directed the first respondent to deposit Rs.25 lakhs to maintain the connection until the writ petition was resolved.
Law Points
- Electricity supply
- statutory conditions
- consumer rights
- recovery of dues
- auction purchaser liabilities
