- (1.) V. K. Gupta, C. J. By this common judgment, we pro pose to dispose of both these appeals. 2. In both the appeals, common questions of law and fact are involved. In Special Appeal No. 25 of 2008, the judgment dated 14th February, 2008 passed by a learned Single Judge of this Court in Writ Petition No. 869 of 2007 (M/s) is under challenge, whereas in Special Appeal No. 198 of 2007, the judgment dated 7th Novem ber, 2007 passed by a learned Single Judge of this Court in Writ Petition No. 1136 of 2007 (M/s) has been as sailed by the appellants. The judgment dated 14th February, 2008 passed in Writ Petition No. 869 of 2007 (M/s) actually in turn itself is based upon the judgment dated 7th November, 2007 passed in Writ Petition No. 1136 of 2007 (M/s) and, therefore, while dis posing of these two appeals by this common judgment, we shall be actu ally examining the legality and correct ness of the judgment dated 7th Novem ber, 2007. 3. The common question of law, involved in both these appeals, re volves around the obligation and the liability of the respondents to pay the arrears of electricity bills with respect to the premises purchased by them in auction from financial institutions, such arrears of electricity bills being outstanding and due from the previous owners of these premises. It is the un disputed case of the parties before us that the respondents in both the ap peals have nothing to do with the pre vious owners of the premises and the consumers of the electricity. It is not the case of the appellants before us that either there is any commonality of identity or interest between the re spondents- writ petitioners- auction purchasers and the previous consum ers/owners of the premises purchased, or that the previous owners have ei ther set up the writ petitioners as the new owners or that the writ petition ers, in the guise of new owners, are in fact and in effect and substance, the re-incarnation of the previous owners. On the other hand, the admitted case of the parties before us is that the respondents- writ petitioners-purchas ers, in their capacity as the new own ers, have absolutely no link or connec tion with previous owners of the premises and the consumers of the electricity under the old connections. 4. Let us notice the relevant facts first. In Special Appeal No. 25 of 2008, the property in question, admittedly, was purchased on 17th August, 2006 by the respondents. M/s Searsole Chemical Ltd. was the previous owner of the property situated at Kauwanwala, Dehradun. M/s. Searsole Chemical Ltd. was under liquidation. A Civil Petition No. , 207 of 2001 was filed in Calcutta High Court and auc tion, the official liquidator, by inviting bids, sold the property for Rs. 4, 65, 00, 000/- (Rupees Four Crores and Sixty Five Lakhs only) in favour of the writ petitioners. The sale was confirmed by Calcutta High Court and accordingly a Deed of Conveyance was executed on 17th August, 2006 in favour of respondent No. 1 by the of ficial liquidator, Calcutta High Court. After becoming the owner of the prop erty, based upon the execution of the Conveyance Deed dated 17th August, 2006 and after entering into the pos session of the property, the respond ents applied on 5th February, 2007 for an electric connection. The appellants rejected the application/request of the respondents for a fresh electric con nection on the ground that with respect to an earlier electric connection in the premises in question, an amount of Rs. 98, 83, 735/- was due against and out standing from M/s Searsole Chemical Ltd. , the previous owner of the premises in question and the holder of the earlier/previous electric connection. 5. In Special Appeal No. 198 of 2007, the writ petitioner, sole respond ent, M/s Shree Prabhu Sharan Ispat Pvt. Ltd. purchased a Unit by the name of M/s J. K. M. Steel Pvt. Ltd. M/s J. K. M. Steel Pvt. Ltd. was a debtor of the Union Bank of India and since it had failed to repay the loan out standing against it, Union Bank of In dia initiated proceedings against M/s. J. K. M. Steel Pvt. Ltd. under the pro visions of The Securitization and Recon struction of Financial Assets and En forcement of Security Interest Act, 2002 ('2002 Act' for short) for recovery of its dues from the said concern. Under the provisions of 2002 Act, the Bank took possession of the Unit in question and held an open auction for its sale. Along with others, the re spondent participated in the open auc tion and purchased the Unit for an amount of Rs. 28, 50, 000/- (Rupees Twenty Eight Lakhs and Fifty Thou sand only), which is situated at 437, M. Garhinegi, Kashipur, District Udham Singh Nagar. The property in question was purchased vide a sale certificate is sued on 18th November, 2006. Sale Deed in favour of the respondent/writ petitioner was executed by the Union Bank of India on 28th March, 2007. After becoming the owner of the prop erty in question and after entering upon its possession, the respondent/writ peti tioner applied to the appellants for ob taining a fresh electric connection for the premises in question. This application was made on 13th December, 2006. Apparently because nothing was done, one more application was made on 20th December, 2006 with the request to sanction a fresh electricity connection of 1800 KVA. The appellants have refused to sanction/grant electricity connection to the respondent writ petitioner on the ground that there is an outstanding due of Rs. 7, 26, 00, 000/- (Rupees Seven Crores and Twenty Six Lakhs only) over the premises in question against the pre vious owner and unless this amount is paid/cleared by the respondent/writ pe titioner, the electric connection in its favour cannot be granted. 6. Reliance has been placed by Mr. Alok Singh, learned Senior Coun sel appearing for the appellants upon Regulation No. 3 (2) and Regulation No. 5 (7) of the Uttarakhand Electric ity Regulatory Commission (Release of new LT Connections, Enhancement and Reduction of Loads) Regulations, 2007 (hereinafter called as '2007 Regulations' ). Regulation 3 (2) of these Regulations reads as under : "3 (2) Where the applicant has purchased an existing property whose electricity connection has been disconnected, it shall be the duty of the applicant to verify that the previous owner has paid all dues to the Licensee and has ob tained a "no-dues certificate" from him. In case such "no-dues certifi cate" has not been obtained by the previous owner, before purchase of property, the new owner may approach the concerned officer of the Licensee for a such certificate. The licensee shall acknowledge the re ceipt of such request and shall ei ther intimate in writing the dues outstanding on the premises, if any, or issue the "no-dues certifi cate" within one month from the date of receipt of such application. In case the Licensee does not inti mate the outstanding dues or is sue the "no-dues certificate" within this time, new connection on the premises shall not be denied on ground of outstanding dues of the previous consumer. In such an event, the licensee shall have to re cover his dues from previous con sumer as per provisions of law". "5 (7) Licensee shall also ascertain whether any dues are outstanding on the premises and if so, the licensee shall issue a demand note within 5 days from date of appli cation giving full details of such outstanding amount. The applicant shall be required to deposit out standing dues within 15 days failing which his application shall lapse and the applicant shall be informed accordingly in writing un der acknowledgment". 7. Whether the aforesaid two par ticular regulations, namely Regulation 3 (2) and Regulation 5 (7), are attracted in the cases of the respondents or not is a matter, which we shall advert to later in this judgment. 8. At the outset, let us find out whether the 2007 regulations at all ap ply to the cases of the respondents or not. First and foremost, it has to be seen that even though the 2007 Regu lations were issued vide notification dated 26th February, 2007, these were published in the Official Gazette on 3rd March, 2007. As per Regulation No. 1 (2), the Regulations would come into force on the date of the publica tion in the official Gazette. As has been noticed, the properties in ques tion, in both the cases, were pur chased on 17th August, 2006 and 18th November, 2006, even though in Spe cial Appeal No. 198 of 2007, the sale deed was executed on 28th March, 2007, but by looking at the sale letter as well as the contents of the sale deed, we have no doubt in our minds that the title with respect to the property in question passed over in favour of the respondent in Special Appeal No. 198 of 2007, on 18th November, 2006. If the properties were purchased by the respondents before "the coming into' force of the 2007 Regulations, can it be said that the 2007 Regulations would be applicable to their cases? Our answer is in the negative because the liability if at all to pay the dues of the previous owners of the properties and the previous consumers is trace able only to the 2007 Regulations. It is in 2007 Regulations, for the first time, that liability to pay, if at all might be said to have come into existence because the respondents had pur chased the properties before the Regulations came into force. Therefore, as on the date of the purchase of the prop erties, they were not liable to pay the dues of the previous owners. 9. Mr. Alok Singh, learned Senior Counsel relied upon a judgment of the Supreme Court in the case of Dakshin Haryana Biji Vitran Nigam Ltd. Vs. Paramount Polymers (P) Ltd. reported in (2006) 13 S. C. C. 101, to contend that by virtue of the ratio laid down in the aforesaid judgment of the Su preme Court, the date of purchase of the property is not relevant. He has relied upon this judgment also in sup port of his contention that by virtue of an identical condition, the new pur chaser in the aforesaid case was held liable to pay the outstanding dues of the previous consumer. 10. On two counts, we disagree with the contention of Mr. Alok Singh and hold that the aforesaid Supreme Court judgment in Dakshin Haryana Biji Vitran Nigam Ltd. (supra) is not attracted and applicable to the facts of these cases. The particular condi tion of the Terms and Conditions of Supply of electric energy by the appel lant in the aforesaid Supreme Court case, upon which their Lordships of the Supreme Court placed reliance to hold that the respondent was liable to pay for the electric dues of the previous consumer, has been extracted in para 9 of the said judgment. For ready ref erence, we also, on our part, wish to take note of and rely upon the said condition, being condition No. 21-A in the aforesaid case, which reads thus : "21-A (a) When there is transfer of ownership or right of occupancy of a premises, the registered consumer shall intimate the transfer of right of occupancy of the premises within 15 days to the Assistant Engineer/as sistant Executive Engineer con cerned. Intimation having been re ceived, the service shall be discon nected unless application for trans fer is allowed. If the transferee de sires to enjoy the service connection, he shall pay the outstanding dues, if any, to the Nigam and apply for transfer of the service connection within 30 days and execute fresh agreement and furnish fresh secu rity. New consumer number shall be allotted in such cases canceling the previous number. (b) Reconnection or new connec tion shall not be given to any premises where there are arrears on any account due to the Nigam unless these are cleared in ad vance. If the new owner/occupier/allottee remits the amount due from the previous consumer, the Nigam shall provide reconnection or new connection depending upon whether the service remains dis connected/dismantled, as the case may be. The amount so remitted will be adjusted against the dues from the previous consumer. If the Nigam gets the full or partial dues from the previous consumer through legal proceedings, or otherwise, the amount remitted by the new owner/occupier to whom the connection has been effected shall be refunded to that extent. But the amount already remitted by him/her shall not bear any interest. (c) The above proposed provisions of clauses 21-A (a) and (b) shall be applicable to existing consumers also where defaulting amount ex ists, against premises occupied by such consumer. " 11. Comparing Regulation No. 3 (2) and Regulation No. 5 (7) of 2007 Regulations in our case with the afore said Condition No. 21-A, we immedi ately come to the conclusion that whereas in Condition No. 21-A, there is a clear, unequivocal and categori cal obligation on the part of the trans feree of the ownership of the property to clear the dues in advance of the pre vious owner and unless the transferee does so, he is not entitled to the grant of new connection, in Regulation No. 3 (2) or Regulation No. 5 (7), there is absolutely no such obligation on the part of the new purchaser of the prop erty. All that the aforesaid two regu lations of 2007 Regulations, read to gether, provide for and require is that where a person has purchased a property, the electricity connection whereof stood disconnected, it would be his duty to verify that the previous owner had paid all dues to the licensee and had obtained a "no-dues certificate". If no such certificate had been obtained by the previous owner before the pur chase of the property, the new owner has to approach the licensee for the issuance of such a certificate. The li censee shall acknowledge the receipt of such request and either intimate in writing the dues outstanding, if any, or issue the "no-dues certificate". In other words, these Regulations do not cast any obligation upon or create any liability in the new purchaser to clear-the outstanding dues of the previous owner as a condition precedent for obtaining the electric connection. For whatever it is worthy of interpretation and whatever its meaning and purport may be, these Regulations only cast a duty on the new purchaser to either obtain the "no-dues certificate" from the previous owner or from the licen see or obtain from the licensee, the amount due from the previous owner. These Regulations stop at that. These do not create any further, additional liability upon the new purchaser. 12. Coming specifically to the ap plicability of the 2007 Regulations af ter noticing the clearly stated intent and purport of Regulations Nos. 3 (2) and 5 (7)' (supra), in the light of the ratio of the aforesaid Supreme Court judgment, what we find is that their Lordships in Dakshin Haryana Bijli Vitran Nigam Ltd. (supra) clearly held that the aforesaid condition No. 21-A would apply if after the coming into force of the condition, the respondent in that case had made the application for new connection. As we have seen in our cases, apart from the fact that the properties were purchased prior to the coming into force of the 2007 Regulations, the applications for new connections by the respondents stood filed on 5th February, 2007 and 13th December, 2006, that is much prior to the coming into force of the 2007 Regulations. 13. Apart from the aforesaid, it is noteworthy to observe that 2007 Regu lations apply only to Low Tension (LT) Connections. These regulations, there fore, do not apply to High Tension Connections at all. In Special Appeal No. 198 of 2007, the new connection applied for was of High Tension. 14. During the course of arguments, reference was also invited to Uttarakhand Electricity Regulatory Com mission (The Electricity Supply Code) Regulations, 2007 ('2007 April Regula tions' for short ). These Regulations were issued vide notification dated 17th April, 2007 and as per para 1. 1 (3), these would come into force on the date of the publication in the official Gazette. Undoubtedly, the publication must have taken place after 17th April, 2007, the date of issuance of the notification be cause we have not been told by Mr. Alok Singh as to when actually these were published. Based on the reasoning that we have adopted with respect to 2007 Regulations, we have no hesitation in holding that as far as the cases of the respondents are concerned, 2007 April Regulations also have no applicability because the properties in question were purchased before the coming into force of these two Regulations and the re spondents had also applied for electric connections much before the date when these Regulations came into force. 15. The law on the subject has very succinctly been stated by their Lordships of the Supreme Court in the case of Isha Marbles Vs. Bihar State Electricity Board and another reported in (1995) 2 S. C. C. 648. In para 63 of the judgment, it has been observed as under : "63. We are clearly of the opinion that there is great reason and jus tice in holding as above. Electricity is public property. Law, in its majesty, benignly protects public property and behooves everyone to respect public property. Hence, the courts must be zealous in this re gard. But, the law, as it stands, is inadequate to enforce the liability of the previous contracting party against the auction purchaser who is a third party and is in no way connected with the previous owner/occupier. It may not be correct to state, if we hold as we have done above, it would permit dishonest consumers transferring their units from one hand to another, from time to time, infinitum without the payment of the dues to the extent of lakhs and lakhs of rupees and each one of them can easily say that he is not liable for the liabil ity of the predecessor in interest. No doubt, dishonest consumers cannot be allowed to play truant with the public property but inad equacy of the law can hardly be a substitute for overzealousness. . . . . . . . . . . . . . . . . . . . . . . . . " 16. Referring to Section 24 of the Indian Electricity Act, 19it) (since re pealed by the Electricity Act, 2003) and quoting with approval the obser vations of Patna High Court, the fol lowing observation in para 56 of the same judgment was made to hold that as far as the outstanding dues of the previous consumers are concerned, there is no charge over the property. We quote the following observations in para 56 with advantage : "56. From the above it is clear that the High Court has chosen to construe Section 24 of. the Electricity Act correctly. There is no charge over the property. Where that premises comes to be owned or occupied by the auction-pur chaser, when such purchaser seeks supply of electric energy he cannot be called upon to clear the payment of outstanding dues against the electricity in re spect of the premises will not be insisted upon as a condition precedent for the supply of electricity to him unless it is proved that any party has stepped under the garb of new entity purely to defraud and cheat UPCL and to evade pay ment of past dues and/or there is close nexus between the previous and the present owner/management.
(2.) CONSEQUENT to above the UPCL's Office Memorandum No. 831 31. 10. 2002 is suspended with immediate effect. S. P. S. Raghav Chairman and Managing Director" 19. As has been noticed, this Of fice Memorandum has been issued by no less a person than the Chairperson and Managing Director of the appel lant Corporation'. The learned Single Judge, by relying upon this Office Memorandum, has made a pertinent observation that the contents thereof clearly clarify the position in favour of the respondents. Even though the learned Single Judge has begun and stopped at that, we, on our part, wish to elaborate that if the appellants took a conscious decision that such new management of a Unit, which has been purchased from UPFC, will be allowed/released the new connection in the same premises in the name of the new owner without insisting upon the payment of the dues of the previ ous owner, it is not open to it to dis criminate against similarly placed pur chasers of properties from other finan cial institutions. The intention behind issuance of the Office Memorandum dated 16th August, 2004 is that if in a bona fide and genuine sale transaction, a financial institution has taken over a property in discharge of its debts due from a debtor and to recover its dues and by way of liquidation of its debts, if it sells the property in auction by conducting an open auction, the per son, who purchases such a property, should not be bound to pay the elec tricity dues of the previous owner. The cases of the respondents are no different. In their cases also they have purchased the properties in question in identical and similar circumstances. The analogy of UPFC, therefore, can be applied with equal force to the cases of the respondents as well. 20. In Special Appeal No. 198 of 2007, Mr. Sudhanshu Dhulia, learned Senior Counsel appearing for the writ petitioner/respondent, has made a very interesting revelation to us during the course of hearing of this case. He stated at the bar that the Unit was purchased by the respondent at a price of Rs. 28, 50, 000/- (Rupees Twenty Eight Lakhs and Fifty Thousand Only ). The Unit is an old, used Furnace. According to Mr. Dhulia, the highest amount at which a brand new Unit of this type, mainly comprising of a Furnace can be pur chased by an entrepreneur is for just about Rupees One Crore or even less. In other words, what Mr. Sudhanshu Dhulia tells us is that the maximum amount that one may have to pay for purchasing a brand new furnace Unit is less than Rupees One Crore, even though the respondent purchased the secondhand Unit in question in auction for Rs. 28, 50, 000/- (Rupees Twenty Eight Lakhs and Fifty Thousand only ). As against this, the appellants have raised a demand of Rs. 7, 27, 00, 000/- (Rupees Seven Crores and Twenty Seven Lakhs only), which they say is payable towards the electricity dues with respect to the premises in question by the erstwhile owner, the previous consumer. Mr. Sudhanshu Dhulia says, rather than paying Rs. 7, 27, 00, 000/- towards the de mand of the unpaid electricity dues of the previous owners, the respondent/writ petitioner may dump this old, secondhand Unit worth a meagre Rs. 28, 50, 000/- in the sea and elect to pur chase a brand new Unit for less than Ru pees One Crore and forget about the whole transaction as a bad dream. If the respondent purchases a brand new Unit for Rupees One Crore and install it at a place unconnected with the erstwhile owner/previous consumer, there will not be any dispute or controversy about the payment of the electricity dues with re spect to the premises in question, ac cording to Mr. Sudhenshu Dhulia. On our part, we wish to offer no comments. 21. For the foregoing reasons, we have no hesitation in holding that, in both the cases, the learned Single Judges were justified in allowing the writ petitions and issuing mandamus to the appellants to provide new electric ity connections sought by the respond ents without insisting upon the pay ment of electricity dues of the previ ous owners, subject of course to the respondents fulfilling all other condi tions required to be fulfilled, observed and complied with under law. 22. The appeals are dismissed. No orders as to costs. .;