Non-Reportable  

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.1918 of 2016

SOUTHERN  POWER  DISTRIBUTION  COMPANY  OF  TELENGANA LTD. THROUGH ITS CMD & ORS.

.... Appellant(s) Versus

GOPAL AGARWAL & ORS. ….Respondent(s)

J U D G M E N T

L. NAGESWARA RAO, J.

The Writ Petition filed by Respondent No.1 challenging

the  action  of  the  Appellants  in  not  releasing  the  Low

Tension (domestic) Power Supply was allowed by a Single

Judge of the Andhra Pradesh High Court.  The appeal filed

by  the  Appellants  was  dismissed  by  the  Division  Bench.

Challenging the legality and validity of the said judgment

the  Appellants  have  approached  this  Court  by  filing  this

appeal.   

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2. The  City  Union  Bank  Limited,  the  Second  Respondent

herein issued a tender/sale notice under SARFAESI Act,

2002  for  sale  of  land,  plant  and  machinery  in  Survey

Nos.168/169  in  Bollaram  village,  Medak  district  which

belonged to M/s J.T. Alloys Private Limited.  The property

was brought to  sale due to default  in  payment  of  the

outstanding loan amount. It was stated in the tender/sale

notice dated 22.02.2006 that the sale would be on “as is

where is” condition.   The First Respondent participated

in the auction and was declared the highest bidder in

respect of dry land measuring 0.36 hectares in Survey

No.168, Bollaram village.  A certificate of sale was issued

by  the  authorised  officer  of  the  Respondent-Bank  on

12.04.2006  and  the  delivery  and  possession  of  the

property  sold  was  made  free  from  all  encumbrances

known  to  the  secured  creditor  on  receipt  of

Rs.1,12,50,000/-.

3. Appellant No.3, the Superintending Engineer, Operation

Circle  Medak,  informed  the  Respondent-Bank  that  an

amount of Rs.1,88,23,185/- was due towards electricity

charges from M/s J.T. Alloys Private Limited.   The Third

Appellant  requested  the  Bank  to  transfer  the  residual 2

amount  realised  from the sale  for  adjustment  towards

arrears payable by M/s J.T.Alloys Private Limited.   The

Bank  informed  the  Third  Appellant  that  there  was  no

amount left after utilisation of the sale proceeds towards

its dues.   

4. The  First  Respondent  applied  for  a  Low  Tension

(domestic) electricity connection to the premises which

he purchased in the auction conducted by the Second

Respondent-Bank.  As there was no response from the

Appellants, the First Respondent filed a Writ Petition in

the High Court of Andhra Pradesh.   The said Writ Petition

was  allowed  by  a  judgment  dated  23.02.2007  on  the

ground that the Petitioner cannot be denied the power

supply  connection  due  to  non  payment  of  arrears

payable  by  the  previous  owner  of  the  property.   The

learned Single Judge of the High Court of Andhra Pradesh

relied upon two judgments of this Court in Ahmedabad

Electricity Co. Ltd. v. Gujarat Inns (P) Ltd.  , (2004)

3  SCC  587  and    Isha  Marbles  v.  Bihar  State

Electricity Board  , (1995) 2 SCC 648.

5. A  Division  Bench  of  the  High  Court  confirmed  the

judgment of the Single Judge by dismissing the appeal

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filed by the Appellants.   The Division Bench held that

there  was  no  evidence  produced  before  the  Court  to

show  that  the  First  Respondent  had  undertaken  to

discharge the liability of the previous consumer.  It was

also held that the Appellants cannot withhold the supply

of  power  to  Respondent  No.1  on  the  specious  ground

that the arrears have not been cleared by the previous

consumer.   The Appellants, as stated earlier, have filed

this appeal assailing the said judgment of the High Court.    

6. We have heard the learned counsel  appearing  for  the

parties and we are of the opinion that there is no reason

to interfere with the judgment of the High Court.  The

High  Court  relied  upon  the  judgment  in  Isha

Marbles(supra) to grant relief to the First Respondent.

It  was  held  in  the  said  judgment  that  an  auction

purchaser  cannot  be  called  upon  to  clear  the  past

arrears.   It was also held that a power connection to an

auction purchaser cannot be withheld for the dues of the

past owner.   The High Court also referred to a judgment

in  Ahmedabad Electricity Company Limited(supra)

wherein the ratio of the judgment in Isha Marbles case

was  reiterated,  particularly  with  reference  to  a  fresh

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connection  for  supply  of  electricity.  In  NESCO  v.

Raghunath Paper Mills (P) Ltd., (2012) 13 SCC 479,

the purchaser in an auction sale conducted by the official

liquidator  on “as is  where is”  and “whatever  there is”

basis was found not liable for payment of the electricity

arrears.   In the said case an advertisement was issued

by  the  official  liquidator  for  sale  of  moveable  and

immoveable property of M/s Konark Paper and Industries

Limited on “as is where is” and whatever there is” basis.

The  auction  purchaser  applied  for  a  fresh  electricity

connection to its unit which was denied on the ground of

non  payment  of  arrears  by  the  past  owner.   After

considering the judgments in  Ahmedabad Electricity

Company  (supra) and Isha  Marbles  (supra), this

Court held that the request of the auction purchaser for a

fresh connection could not have been rejected.   

7. The facts of this case are similar to that of  NESCO v.

Raghunath Paper Mills (P) Ltd., (2012) 13 SCC 479.

The tender/sale notice mentioned that the property was

being  auctioned  on  “as  is  where  is”  basis.   The  First

Respondent applied for a fresh connection and he is in no

way  connected  to  the  past  owner.  He  has  also  not

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undertaken  to  pay  the  past  arrears  of  the  previous

owner.  In view of the above, the Appeal is dismissed.   

                       …................................J                                                              [L. NAGESWARA RAO]

                             .......................................J                   [NAVIN SINHA]

New Delhi, July 27, 2017

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