DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD versus M/S PARAMOUNT POLYMERS PVT. LTD.

Citation: [2006] SUPP. 7 S.C.R. 635 · Decided: 19-10-2006 · Supreme Court of India · Bench: H.K. SEMA

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Judgment (excerpt)

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DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD 
A 
11. 
MIS PARAMOUNT POLYMERS PVT. LTD. 
OCTOBER 19, 2006 
[H.K. SEMA AND P.K. BALASUBRAMANY AN, JJ.] 
B 
Electricity {Supply) Act, 1948-Sections 49 and 79(j)-Disconnection 
of power supply for arrears towards consumption charges of electrical 
energy-Sale of undertaking of consumer on 'as is where is basis '-Thereafter C 
electricity distribution company amending its terms for supply of electrical 
energy whereby no fresh connection in respect of premises could be given to 
a purchaser unless they cleared arrears of consumer whose undertaking had 
been purchased-Subsequent to this, purchaser of undertaking applying for 
connection, but it was rejected-High Court holding that as there was no 
charge on premises for electricity charges and purchase thereof was prior to D 
amendment of terms of supply, electricity distribution company was bound to 
provide electric connection to purchaser-Correctness of-Held-In view of 
Sections 49 and 79(j) of Act of 1948, whereby licensee or Electricity Board 
was empowered to set terms and conditions for supply of electrical energy, 
· the amended terms were not beyond power of distribution company-It was E 
more so as Haryana Government Electrical Undertakings (Dues Recovery) 
Act, 1970 read with Punjab Land Revenue Act, 1887 enabled predecessor of 
electricity distribution company to recover dues on account of consumption 
of electrical energy as an arrear of land revenue and they could be recovered 
by proceeding against undertaking even in hands of transferee-The amended 
terms statutory in nature and not merely contractual; they were reasonable F 
provisions to safeguard rights and interest of power distribution company--
Purchaser was governed by them especially as application for fresh connection 
was made after circulation of communication about them-It was more so as 
sale was on 'as is where is' basis and as a prudent buyer, a reasonable 
enquiry would have put the purchaser on notice about arrears. 
Appeal to Supreme Court-Contentions based on statutes-Put forward 
before Court at time of arguments and not raised either in High Court or in 
petition for special leave to appeal-Consideration of-Held that such 
contentions cannot be ignored-At best, the opposite party could plead that 
635 
G 
H 
636 
SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R. 
A it did not get a proper opportunity to meet them-Matter remitted for fresh 
decision tu High Court with liberty for amendment of pleadings. 
L.L.C. was a consumer of electricity from the appellant, an electricity 
distributing company. It fell into arrears towards consumption charges of 
electrical energy, and because of its failure to pay them, its power supply was 
B disconnected by appellant For its inability to repay the borrowed amounts 
from the State Financial Corporation, L.L.C. was taken over by the 
Corporation and advertised and offered for sale on 'as is where is basis'. The 
bid of respondent was accepted and possession was given to them. Thereafter, 
on 27.11.2001 the appellant incorporated a term in the Terms and Conditions 
C of Supply of electrical energy whereby in cases where a consumer had 
defaulted in paying electrical charges and there had been a consequent 
disconnection of supply, no fresh connection in respect of the premises could 
be given to a purchaser unless the purchaser cleared the amount that was 
left in arrears by the consumer whose undertaking had been purchased. 
Respondent applied for a connection on 1.1 .• 2002.The appellant took the stand 
D that unless the respondent paid the amount outstanding against L.L.C., no 
fresh connection could be given to them. As respondent was not willing to 
comply, their application for connection was rejected. The respondent filed a 
Writ Petition in the High Court for quashing the circular dated 27.11.2001 
introducing the aforesaid condition for fresh connection. Appellant contended 
E that (i) the Circular dated 27.11.2001 was issued in exercise of power under 
Section 49 of the Electricity (Supply) Act, 1948 by the competent authority 
thereunder and the incorporation of such a condition in the Terms and 
Conditions of Supply was statutory in nature and was perfectly valid (ii) a 
substantial amount was due to the appellant from L.L.C. was brought to the 
notice of the Financial Corporation (iii) the sale by the Financial Corporation 
F was on 'as is where is basis' and hence the respondent was liable for the du

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