Part Property Purchaser Not Required To Pay Electricity Dues Over Entire Premises; Non-Apportionment Of Arrears Unfair: Karnataka High Court

The Karnataka High Court, Dharwad Bench, recently directed the Gulbarga Electricity Supply Company Limited to reconsider its decision to recover unpaid electricity dues of the entire premises from an auction purchaser who had bought only a part of the premise. A division bench of Justices Krishna Dixit and Pradeep Singh Yerur while partly allowing the appeal filed by OPG Power Generation Private Limited said,"After all the apportionment of liability has a kinship with the doctrine of proportionality since the non-apportionment in a given circumstance may be true to be unjust & unfair to a perspective consumer who is made to shoulder the entire liability for arrears; no contra-indicative provision in the Supply Conditions is brought to our notice." It added "The decision of the Apex Court in the case of Paschimanchal Vidyut Vitran Nigam v. DVS Steels and Alloys Private Limited, (2009)1 SCC 210, too supports this view. Should that be so, petitioner is more than justified in seeking apportionment of liability for arrears; however, this entire aspect needs to be examined by the respondents themselves afresh, since the foundational facts have to be ascertained from the files in their custody and the same are not readily available on record loaded to the Board here." Senior Advocate GS Khannur appearing for the company had argued that the predecessor-in-title had got the installation to the premises which in all ad-measured about 800 acres and the petitioner having bought only about 15% of this i.e., 119 acres & 62 cents, cannot be asked to pay the entire arrears quantified at Rs.21.63 crore. The petitioner made an application to the power supply company dated 11.05.2011 for sanctioning of power supply. On 19.05.2011, the second respondent herein replied that the erstwhile owner of the property had the power supply of 400 KVA, in 110 KV class vide and the supply was disconnected on 06.05.2010 for non-payment of arrears then quantified at Rs.17.36 crore (now almost doubled) and therefore, unless the same is cleared, power supply cannot be sanctioned. Petitioner's challenge to the aforesaid reply in the subject writ petition, having been negatived by the Single Judge, this appeal was presented. It was submitted by the petitioner that on the date of public auction it had no means of knowing about the arrears in question and of the court cases launched by the erstwhile owner; therefore, it cannot be made vicariously liable. The court turned down the submission by saying,"The question of liability of the erstwhile owner was being litigated upon in the Courts, does not come to the rescue of the petitioner which is admittedly an incorporated Company that has bought the property in question at a price running in crores of rupees. Presumably, it has all men & matter who with due diligence could have known of the arrears of power supply charges and such other levies, that were in crores of rupees; therefore, the petitioner company cannot feign ignorance of the 'likely liabilities' of the kind; had it been the case of a poor peasant, perhaps the considerations would have been much different." The court directed "The respondents to consider afresh and decide after hearing all the stakeholders, as to the apportionment of the liability for arrears in question within an outer limit of four weeks and thereupon consider the application for the power supply within the next four weeks in terms of the said decision; all contentions in this regard are kept open; in all other aspects, the impugned order of the learned Single Judge is left intact."Click Here To Download/Read Judgment

Part Property Purchaser Not Required To Pay Electricity Dues Over Entire Premises; Non-Apportionment Of Arrears Unfair: Karnataka High Court

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