Case Note & Summary
The petitioners, Sambhaji Maharaj Spinning Mill Pvt. Ltd. and its director, purchased the movable and immovable properties of respondent No. 2 (Nanded Sahkari Sootgirni Maryadit) through an auction conducted by the liquidator. The auction was confirmed in their favour for Rs. 8,11,00,000/-, and an agreement for sale was executed on 18.09.2000, followed by sale deeds. Clause 8 of the agreement for sale and covenant No. 4 of the sale deed explicitly provided that the vendor (respondent No. 2) would bear the electricity bills and dues. After purchase, the petitioners applied for a new electricity connection from respondent Nos. 3 and 4 (Maharashtra State Electricity Board/Distribution Company). Respondent No. 4 informed them that certain dues were payable and that the connection could only be given after those dues were cleared. The petitioners contended that they were not liable for the previous owner's dues. The court framed the issue as whether an auction purchaser is liable to pay the electricity dues of the previous owner. The court noted that in the absence of a statutory charge, the auction purchaser is not liable. The sale deed and agreement clearly allocated liability to the vendor. The court held that the Electricity Board cannot deny a new connection for the dues of the predecessor. The petition was allowed, and the respondents were directed to provide a new electricity connection to the petitioners without insisting on payment of the previous owner's arrears.
Headnote
A) Electricity Law - Liability for Dues - Auction Purchaser - Whether auction purchaser liable for previous owner's electricity dues - Electricity Act, 2003, Section 56 - The court held that in the absence of a statutory charge, the auction purchaser is not liable for the electricity dues of the previous owner. The sale deed and agreement for sale specifically provided that the vendor would bear the electricity dues. The Electricity Board cannot deny a new connection for the dues of the predecessor. (Paras 1-10) B) Contract Law - Sale Deed - Covenant - Liability for Dues - Specific Relief Act, 1963 - The agreement for sale and sale deed contained covenants that the vendor would be liable for electricity dues. The court held that the purchaser cannot be made to pay dues which the vendor had agreed to bear. (Paras 3-5) C) Electricity Law - Disconnection - Denial of Connection - Electricity Act, 2003, Section 56 - The court held that the Electricity Board cannot deny a new electricity connection to the auction purchaser on the ground of arrears of the previous owner, as there is no statutory charge on the property for such dues. (Paras 6-10)
Issue of Consideration
Whether the auction purchaser is liable to pay the electricity dues of the previous owner.
Final Decision
The petition is allowed. The respondents are directed to provide a new electricity connection to the petitioners without insisting on payment of the arrears of the previous owner.
Law Points
- Auction purchaser not liable for previous owner's electricity dues unless statutory charge exists
- Electricity dues not a charge on property unless specifically provided by statute
- Agreement for sale and sale deed can allocate liability for dues
- Electricity Board cannot deny connection for dues of predecessor in absence of statutory charge
