U.P. STATE ELECTRICITY BOARD versus BANARAS ELECTRIC LIGHT AND POWER CO. LTD.

Citation: [2001] SUPP. 1 S.C.R. 662 · Decided: 17-08-2001 · Supreme Court of India · Bench: AJAY PRAKASH MISRA · Disposal: Dismissed

Judgment (excerpt)

A 
U.P. STATE ELECTRICITY BOARD 
v. 
BANARAS ELECTRIC LIGHT AND POWER CO. LTD. 
AUGUST 17, 2001 
B 
(A.P. MISRA AND D.P. MOHAPATRA, JJ.] 
Electricity Laws : 
Indian Electricity Act, 1910-Section 6(1), 7-!ndian Electricity (Uttar 
C Pradesh Amendment and Validation Act), 1975-Sections 7, 7 (A)-Company 
supplied electricity to its consumers-UP. Electricity Board purchased the 
undertaking of the company-By virtue of section 7 of the 1910 Act 
undertaking of the company vested in the Board-On the date of take over 
certain dues of the company remained uncollected-Board collected the 
D amount due-Held, not correct-Board to pay the amount realised to the 
liquidators of the company-No provision in the Act requiring licensee to 
deliver the book debts of the company to the Board on vesting of the 
undertaking in the Board 
Appellant Board purchased the undertaking of the respondent-company 
E under section 6 of the Indian Electricity (Uttar Pradesh Amendment and 
Validation) Act, 1975. Consequently the undertaking vested in the Board by 
virtue of Section 7 of the Act. Certain amount was due to the respondent-
company for the electricity supplied to its consumers before the date of 
vesting in the Board. The Board collected the amount from the consumers 
after vesting of the undertaking. In the meantime, company went into voluntary 
F liquidation and joint liquidators were appointed. Thereafter, the liquidators 
filed an application before the High Court to seek an order against the Board 
to pay the liquidators the amount collected with interest and also the further 
collections till date. The company contended before the High Court that the 
Board was required to make over the amount collected by it from the 
G consumers towards such arrear dues of the company to the liquidators. The 
Board contended that it was entitled to retain and appropriate any amount 
collected by it after vesting of the undertaking since the book-debts of the 
company which were part of the undertaking vest~d in the Board. Single 
Judge of High Court allowed the application of the liquidators holding that 
the book debts of the company were not a part of the undertaking which 
H 
662 
U.P. ST ATE ELEC. BOARD v. BA NA RAS ELEC. LIGHT A ND POWER CO LTD. [MOHAPATRA, J.] 663 
vested in the Board under Sections 6 and 7(A) of the Act. It directed the A 
Board to pay the amount collected, to the liquidators. However, it rejected the 
plea of the Board for adjustment/set off of the amount against dues of the 
company to the Board. Division Bench upheld the order. Hence the present 
appeal 
Dismissing the appeals, the Court 
HELD: 1.1. The company is entitled to receive from the Board the 
amounts realised by the Board from consumers towards charges of the 
electricity supplied by the company to them prior to the date of vesting along 
with interest. [ 673-G I 
B 
c 
1.2. There is no provision in the Indian Electricity (Uttar Pradesh 
Amendment and Validation) Act, 1975 requiring the licensee to deliver the 
book debts of the company to the Board on vesting of the Undertaking in the 
latter, nor is there any provision in the statute empowering the Board to 
deduct the amount of unrealised dues of the company from its consumers D 
towards electricity supplied to them prior to the date of vesting from the 
purchase money to be paid by the Board to the company. Further, there is 
no provision in the Act which enables the Board to adjust the said amount 
towards security deposits or any other dues. Therefore, the Board cannot 
make any deduction by way of adjustment or set off from the amount to be 
paid to the company without a statutory mandate in that regard. [673-D-F) E 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 499-500 of 
1983. 
From the Judgment and Order dated 26.8.82 of the Calcutta High Court 
in Appeal from Original Order No. 229/80 and C.P.No. 276 of 1980. 
F 
Ranjit Kumar and M.N. Krishnamani, Pradeep Misra, K.L. Mehta Ms. 
Meera Mathur, Dhruv Mehta and Ms. Shobha for the appearing parties. 
The Judgment of the Court was delivered by 
D.P. MOHAPATRA, J. In these appeals filed by special leave, the 
U.P.State Electricity Board (for short 'the Board'), a statutory body constituted 
under the Electricity (Supply) Act, 1948 assails the judgment of the Division 
Bench of the Calcutta High Court vide its Judgment dated 26.8. 1982 in the 
Appeal from Original Order No. 229 of 1980 dismissing the appeal filed by the 
G 
Board and confirming the j

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