- (1.) THE petitioners have come up with two prayers.- (i) to quash the demand notice dated 5-3-1997 as contained in Annexures '9a, 9b and 9c' to the writ petition, which were issued pursuant to non payment of electrical bills by the petitioners to respondent No. 1 the U. P. State Electricity Board by grant of a writ of certiorari, (ii) to command the respondents not to start recovery proceedings against them without prior sanction of the B. I. F. R. by grant of a writ of mandamus.
(2.) A lot of submissions were made by Sri S. P. Singh, learned Counsel appearing on behalf of the petitioners, while trying to support the prayers with reference to several case laws. His main submissions were that as the proceedings were pending before the B. I. F. R. the bills cannot be paid without its sanction and that before the Electrical Engineer the petitioners had prayed for referring the dispute to the Electrical Inspector, which was not done illegally. Sri Sudhir Agarwal, learned Counsel appearing on behalf of the respondents, on the other hand, submitted, inter alia, that the prayers made by the petitioners are barred on account of applicability of the general principles of res judicata the petitioners should have moved the authority after depositing the disputed amounts mentioned in the bills subject to the result of the decision of the Electrical Engineer. The dispute was not referable to the Electrical Inspector as it was not a case of defective meter. He, too, placed reliance on a number of decisions of this Court as well as the Apex Court. The primal question, which requires to be answered by us is as to whether the petitioner No. 1, which became sick since 26-2-1988, is entitled to the reliefs claimed for where the recovery of the amount of the electrical bills was/is sought to be recovered by the respondents on account of supply of the electrical energy to the petitioner No. 1 after it had become sick?
(3.) IN our view this question has to be answered in the negative i. e. to say against the petitioners. The petitioners came up earlier before this Court in Civil Misc. Writ Petition No. 21537 of 1996 for quashing the recovery proceedings instituted on account of non payment of electrical bills issued on 12- 6-1996 (as contained in Annexures '11a, 11b and 11c') as also the demand notices issued on 12-6-1996 (as contained in Annexures '12a, 12b and 12c' ). A Division Bench of this Court vide its Judgment and order dated 17-7-1996 held that the respondents are justified in demanding dues against the petitioners after rejecting the submissions which have been repeated before us though supplemented with further arguments. The operative part of the decision of this Court reads thus:- "the main thrust of the submissions of the learned Counsel for the petitioners in that the company has been declared as sick industrial company and the respondents are not justified in taking any proceedings for recovery of the amount in view of the provisions of Section 22 of the Act. Section 22 (1) of the Act provides that no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the appellate authority. It is not disputed that the company was declared as a sick industrial company by the Board on 26-2-1988 but the company continued to function and consumed electricity and on 27th March, 1996, for three separate connections, the bills were sent for the period 1-10-1991 to 28-2-1996. The amount of the bills was not paid and thereafter demand notice has been sent on 12th June, 1996 under Section 3 of U. P. Government Electrical Undertakings (Dues Recovery) Act, 1958 and further the bills have been sent for the period covering up to 31st May, 1996 which has been filed as Annexures 11a, 11b and 11c to the writ petition. The legislative intent was to rehabilitate the sick company in various modes as provided under Section 18 of the Act. The Company, however, by functioning and taking raw materials, electric connection or consuming any other article or incurring further liability, cannot take shelter of Section 22 of the Act by saying that the amount which it is liable to pay to the supplier will not be paid unless the consent of the Board is taken. In M/s. Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association, Madras, AIR 1992 SC 1439, where the landlord filed a suit for eviction of the company after terminating the tenancy on the ground of default in payment of arrears of rent, the argument raised on behalf of the company that it is not liable to pay the rent or eviction as it has been declared a sick industry, was repelled by their Lordships of the Supreme Court explaining the object of the enactment in the following words:- "we may, in this context, point out that, as indicated in the Premable, the Act has been enacted to make special provisions with a view to securing the timely detention of sick and potentially sick companies owning industrial undertakings, the speedy determination by a Board of experts of the preventive, ameliorative, remedial and other measures which need to be taken with respect of such companies and the expeditious enforcement of the measures so determined. The provision regarding suspension of legal proceedings contained in Section 22 (1) seeks to advance the object of the Act by ensuring that a proceeding having an effect on the working or the finance of a sick industrial company shall not be instituted or continued during the period the matter is under consideration before the Board or the appellate authority or a sanctioned scheme is under implementation without the consent of the Board or the appellate authority. It could not be the intention of Parliament in enacting the said provision to aggravate the financial difficulties of a sick industrial company while the said matters were pending before the Board or the appellate authority by enabling a sick industrial company to continue to incur further liabilities during this period. This would be the consequence if sub-section (1) of S. 22 is construed to bring about suspension of proceedings for eviction instituted by landlord against a sick industrial company which has ceased to enjoy the protection of the relevant rent law on account of default in payment of rent. " In C. E. S. C. Limited v. Bowrech Cotton Mills Co. Ltd. , 1993 Supp (1) SCC 451, the Supreme Court set aside the order of the High Court whereby stay was granted for recovery of electricity dues on the ground the company was declared as sick company under Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. It was held that such company was also laible to pay electricity dues. In Misc. Writ Petition No. 11220 of 1996 Foremost Industries (India) Ltd. Kailashpur, Dehradun Road, Saharanpur v. State of U. P. , and others this Court held that where the petitioner was carrying on business even after it has been declared as sick company but went on purchasing raw materials i. e. milk etc. it was laible to pay cess amount which was levied on the milk used by the petitioner and can be recovered even by coercive process. Learned counsel for the petitioners has placed reliance upon the decision Gram Punchayat v. Shree Vallabh Glass Works Ltd. , AIR 1990 SC 1017, wherein it was held that the property tax due against village Panchayat cannot be recovered by coercive process under Section 129 of the Bombay Village Panchayat Act. It was not a case where the comapny was functioning and incurring further liabilities on account of its own action or omission after it was declared as sick. The object of Section 22 of the Act is not that a company may continue to function and incur further liabilities by making purchases, consuming electricity and thereafter say that recovery proceedings cannot be taken against it except with the permission of the Board under Section 22 (1) of the Act. The petitioner was declared as a sick unit as early as on 26-2-1988. The recovery is for the period 1-10-1991 to 31-5-1996. Respondents are justified in making the demand for electricity charges due against the petitioners. ";