REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

I.A. NO.  5 IN

CIVIL APPEAL NO. 2630 OF 1982

Bihar State Electricity Board … Appellant  

Vs.

The Patna Electric Supply Co.  Ltd. & Ors. Respondents

O R D E R

1. After  the  respondent  No.1,  Patna  Electric  

Supply Company Limited (PESCO), was taken over  

by the appellant, Bihar State Electricity Board  

(BSEB),  certain  disputes  arose  regarding  

payment of compensation by BSEB to PESCO in  

respect of the assets of PESCO.  This resulted  

in litigation and ultimately in C.A. No.2630 of

1982 this Court, while granting leave, directed  

that BSEB would pay to PESCO the purchase price  

on the basis of book-value in accordance with  

the provisions of the Indian Electricity Act,  

1910. Since payments were not made by BSEB to  

PESCO in terms of the said directions, PESCO  

filed I.A. No.5 for appropriate directions to  

be given to BSEB in this regard.

2. On 8.1.2005, after noting that what was payable  

by BSEB to PESCO was the book-value and not the  

market value of the assets of PESCO, this Court,  

after taking into consideration the submissions of  

the respective parties, came to the conclusion that  

the  net  amount  of  compensation  payable  to  PESCO  

worked  out  to  135.45  lakhs.  Out  of  the  said  

amount, a sum of 99.72 lakhs had already been paid  

by BSEB to PESCO, leaving a balance amount of   

35.74 lakhs payable by BSEB to PESCO. It was also  

noted that under the directions of this Court the  

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balance amount of  35.74 lakhs had been paid by  

BSEB to the Bank of India to liquidate the dues of  

PESCO.

3. In addition to the above, a further sum of   

36.59 lakhs was shown as liability in the accounts  

of PESCO.  It was noted that it was not the case of  

BSEB that the said amount had been paid by it to  

the aforesaid Bank.  On the other hand, it was  

noted that it was PESCO’s case  that this amount  

had been  paid by it to the Bank of India and in  

support thereof a ‘No Objection Certificate’ dated  

21.3.2001 issued by the Bank in favour of PESCO had  

been  placed  on  record.   On  the  basis  of  the  

aforesaid calculations and the submissions made on  

behalf  of  the  respective  parties,  I.A.  No.5  was  

disposed of with the following observations :

(1) The  amount  of  consumer  dues  calculated  while  arriving  at  the  book  value of the assets of PESCO cannot be  questioned by BSEB at this stage;

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(2) PESCO  is  entitled  to  the  sum  of  Rs.36.59 lakhs provided it has made the  payment on that account to the Bank; and

(3) PESCO is entitled to interest in the  manner  above  stated  on  filing  requisite  material on record along with an affidavit  showing payment of interest.

4. Thereafter, the matter was taken up on several  

occasions  to  enable  PESCO  to  prove  that  such  

payment had actually been made by PESCO to the Bank  

of India on account whereof the said amount was  

shown  as  a  liability  in  PESCO’s  accounts.  On  

26.3.2009, the Bank of India, Kolkata Main Branch,  

was directed to supply the statements relating to  

the cash credit account maintained by PESCO for the  

period commencing from 1973 till the closure of the  

account.  Leave  was  given  to  the  appellant  to  

respond to the same once the statements were made  

available by the Bank.  Ultimately, on 30.9.2010 it  

was  submitted  on  behalf  of  the  Bank  that  the  

information, as was required to be given, had been  

filed by way of separate affidavits and leave was  

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also  granted  to  file  an  additional  affidavit  to  

place on record certain other documents.

5.  The first affidavit affirmed on behalf of the  

Bank  on  31.10.2006  mentions  a  final  settlement  

arrived at between the Bank and PESCO, to the tune  

of  45.93  lakhs  and  with  the  interest  accrued  

thereupon  the  amount  became  48.34  lakhs.  

According to the Bank records, the said amount was  

paid by PESCO between 15.1.2001 to 19.12.2001. The  

second  affidavit  affirmed  on  behalf  of  the  Bank  

indicates that the balance as was outstanding in  

the Cash Credit Account of PESCO, as on 5.2.1974,  

was 37,26,137.77.  It was also made clear that a  

sum of 84,08,363/- had been received by the Bank,  

out of which BSEB had paid 38.74 lakhs and PESCO  

had paid 48,34,363/-. It is, therefore, clear that  

the Bank received two amounts, one from BSES and  

the other from PESCO.   It is also clear that the  

amount of 35.74 lakhs paid by BSEB, which was the  

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balance of the book-value of the assets of PESCO,  

was pursuant to the directions given by the Court  

on account of the fact that the said amount had  

initially been paid by PESCO.  It is also clear  

that the other amount of 48,34,363/- was paid by  

PESCO to the Bank and was the Cash Credit amount of  

PESCO’s  account  with  Bank  of  India,  and  which  

amount,  together  with  interest,  was  payable  to  

PESCO in terms of the order passed by this Court on  

8.11.2005.

 6. This  was  in  effect  the  substance  of  the  

submissions  made  by  Mr.  Puneet  Jain,  learned  

Advocate, appearing for PESCO.  On the other hand,  

learned  Additional  Solicitor  General,  Mr.  Gaurav  

Banerjee,  submitted  that  once  the  total  dues  of  

PESCO had been assessed at  135.46 lakhs and the  

entire amount had been paid, including a sum of  

35.74  lakhs  paid  by  BSEB  to  the  Bank,  nothing  

further remained outstanding to be paid to PESCO.

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7. We  have  carefully  considered  the  submissions  

made on behalf of the respective parties and it is  

necessary  to  put  an  end  to  the  controversy  

regarding  the  amount  which  PESCO  is  entitled  to  

receive from the BSEB on account of its take over  

by the BSEB.

8. The figure of 135.46 lakhs was arrived at by  

this Court upon deducting all the liabilities from  

the book-value of the assets of PESCO, after taking  

into consideration the ad hoc payments made by BSEB  

to  PESCO  to  the  tune  of  99.72  lakhs  between  

1.4.1974 and 8.2.1980.   This Court concluded that  

the net amount payable to PESCO was 35.74 lakhs,  

which, in fact, was due from PESCO to the Bank and  

which  amount  was  ultimately  liquidated  by  BSEB.  

The dues in relation to the said sum of  135.46  

lakhs, therefore, stood concluded on such payments  

being made.  Further this Court also took notice of  

the sum of 36.59 lakhs in the liabilities column  

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of PESCO’s account and the same was shown against  

cash  credit  with  Bank  of  India.  Ultimately,  as  

indicated hereinbefore, this Court held that PESCO  

was  also  entitled  to  the  sum  of  36.59  lakhs,  

provided such payment had been paid by PESCO to the  

Bank.

9. One of the affidavits filed on behalf of the  

Bank, as referred to hereinabove, clearly indicates  

that the said sum of 48,34,363/-, had been paid by  

PESCO to the Bank.   The third affidavit affirmed  

on behalf of the Bank on 30.9.2010, contains an  

annexure being a letter addressed to PESCO by the  

Bank of India certifying that PESCO had paid to the  

Bank  a  sum  of  48,34,363/-  between  15.1.2001  to  

19.12.2001 towards  final settlement of dues to the  

Bank.

10. Accordingly,  in  terms  of  the  order  dated  

8.11.2005, PESCO is entitled to recover the said  

sum from BSEB, since it has been able to prove that  

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the  amount  had  been  paid  by  it  to  the  Bank.  

Consequently, the directions given on 5.4.2011 for  

reimbursement  of  the  aforesaid  amount  to  PESCO,  

together with interest @ 6 per cent per annum, from  

19.12.2001 till the date of the order, in view of  

what  has  been  discussed  hereinabove,  does  not  

require  any  elaboration.   The  application  for  

direction, is therefore, disposed of in terms of  

the order passed by this Court on 15.4.2011.  The  

payment,  if  not  made,  shall  be  made  within  one  

month from the date of communication of this order.

………………………………………J.                        (ALTAMAS KABIR)

………………………………………J.                             (D.K. JAIN)

………………………………………J. (MARKANDEY KATJU)

New Delhi, Dated:01.09.2011

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