Decided on September 14,2004



Pratibha Upasani, - (1.) THIS Miscellaneous Appeal is filed by the appellant/third party purchaser/auction purchaser M/s. Sapthagiri Pee Gee Fruits Processing (P) Ltd., being aggrieved by the common order dated 24.12.2003 passed by the learned Presiding Officer of DRT-I, Chennai, on the Interim Application IA No. 750/2002. By the impugned order the learned Presiding Officer rejected the application made by the auction purchaser in which a prayer was sought that the DRT should pass order directing the Recovery Officer/Bank that the amount of Rs. 2,91,255/- out of Rs. 75 lakhs deposited by the auction purchaser towards the sale proceeds, be paid directly to the Tamil Nadu Electricity Board (for the sake of brevity hereinafter referred to as TNEB), Dharmapuri Circle, Dharmapuri. Apprehension was expressed that if these arrears of electricity were not paid, then the auction purchaser might face disconnection of electricity supply.
(2.) Few facts which are required to be stated are as follows: Property belonging to the Certificate debtor M/s. Dharmapuri Steel Castings Ltd., Dharmapuri, which was mortgaged to the applicant Bank namely, UCO Bank, was purchased by the present appellant at auction held by the Recovery Officer during the course of recovery proceedings initiated against the Certificate debtor. The property consisted of land along with building and old machinery equipment, etc. While tenders were invited by the Recovery Officer for sale of the steel castings factory of the Certificate debtor, they were invited on 'as is where is basis'. The bid of the present appellant was accepted. The amount paid by the auction purchaser/present appellant was Rs. 75 lakhs. The appellant later on came to realise that there were electricity dues by TNEB to the tune of Rs. 2,91,255/-. As per rules of the TNEB, if this amount was not paid the auction purchaser would have faced disconnection of electricity supply. Therefore, application came to be made by the appellants/auction purchaser that this amount of Rs. 2,91,255/- out of the deposit of Rs. 75 lakhs made by the auction purchaser towards sale proceeds in the Tribunal/Bank be paid directly to the TNEB. It was this application which came to be rejected by the learned Presiding Officer of DRT-I, Chennai. I have heard Mr. M.G.C. Prabhakar, Advocate for the respondent Bank. I have also gone through the proceedings including the impugned order, the offer inviting tenders by the Recovery Officer for sale of the mortgaged property and the terms and conditions under which sealed tenders were invited. In the said text, description of the property is given and it is specifically and categorically mentioned that tenders are invited for sale on 'as is where is basis' for realising the dues of M/s. Dharmapuri Steel Castings (Certificate debtor). Thus the said invitation leaves no room for doubt that the premises were to be purchased in the auction by the auction purchaser on 'as is where is basis'. The appellants, therefore, ought to have been on their guard, ought to have been vigilant and alert and should have made inquiries whether there were any encumbrance on the property. Since the appellants, in spite of being businessmen did not make any such inquiry which reasonably any prudent businessmen would have made, it was revealed later on that TNEB had dues of Rs. 2,91,255/ by way of outstandings.
(3.) CLAUSE 6.10 of the terms and conditions of supply of electricity of TNEB specifically says that in such a contingency the intending purchaser has to pay the arrears. CLAUSE 6.10 can be reproduced below for the sake of convenience: "The Board will refuse to supply electricity to an intending consumer who has defaulted in payment of dues to the Board in respect of any other service connection held in his name. In case of services which have been disconnected/dismantled for non-payment of arrears and if the services are to be availed by other parties in the same premises either by purchase or transfer or in auction or on lease basis then in such cases the services will be effected only on clearance of the dues outstanding against such disconnected/ dismantled service by the intending consumers.";

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