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Dakshin Haryana Bijli Vitran Nigam Limited And Another v. Excel Buildcon Private Limited And Others
Factual and Procedural Background
The appellant, Dakshin Haryana Bijli Vitran Nigam Ltd. (“the Nigam”), raised a demand of ₹85,21,235 towards arrears of electricity dues. Respondent 1 filed a writ petition before the Punjab and Haryana High Court challenging the validity of Clause 21-A of the Terms and Conditions of Supply framed under Section 49 read with Section 79(j) of the Electricity (Supply) Act, 1948. While issuing notice of motion, the High Court unconditionally stayed the recovery of the arrears and directed the Nigam to release an electricity connection to Respondent 1.
Aggrieved, the Nigam appealed to the Supreme Court. During the pendency of the appeal, Respondent 1 undertook to deposit ₹10 lakh, upon which the Supreme Court directed restoration of supply. The present order decides the appeal against the High Court’s interim stay.
Legal Issues Presented
- Whether the High Court was justified in granting an unconditional interim stay of the Nigam’s demand for arrears while Clause 21-A’s validity was under challenge.
- What interim monetary conditions, if any, should be imposed on Respondent 1 to balance equities pending adjudication of the writ petition on Clause 21-A’s validity.
Arguments of the Parties
Appellant’s Arguments
- Relied on the Supreme Court decision in Dakshin Haryana Bijli Vitran Nigam Ltd. v. Paramount Polymers (P) Ltd. (2006) 13 SCC 101 to contend that the High Court should not have granted an unconditional stay.
- Emphasised that under Clause 21-A, Respondent 1 is liable to pay the outstanding ₹85,21,235 before supply can be granted.
Respondent 1’s Arguments
- Argued that, because the auction notice for the premises contained no clause saddling the purchaser with past electricity dues, Respondent 1 could not be burdened with Respondent 3’s liabilities.
- Submitted that the precedent cited by the Nigam is distinguishable since the constitutional validity of Clause 21-A was not under challenge in that earlier case.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Dakshin Haryana Bijli Vitran Nigam Ltd. v. Paramount Polymers (P) Ltd. (2006) 13 SCC 101 | Interpreted Clause 21-A; permitted conditional continuation of supply upon payment of specified amount. | Used as guiding authority to hold that an unconditional stay was improper and to determine the quantum Respondent 1 must deposit. |
| Isha Marbles v. Bihar SEB (1995) 2 SCC 648 | Earlier ruling on liability of auction purchasers for previous electricity dues. | Distinguished in the precedent above; referenced to show that Clause 21-A prevails over that earlier view. |
Court's Reasoning and Analysis
The Court declined to decide the substantive validity of Clause 21-A because the issue is pending before the High Court. It nevertheless found the High Court’s unconditional stay “legally unsustainable.” Relying on the ratio of Paramount Polymers, the Court reasoned that equity requires an interim monetary safeguard to protect the Nigam’s financial interest while allowing Respondent 1 to maintain electricity supply. Since Respondent 1 had already deposited ₹10 lakh, the Court ordered an additional deposit of ₹25 lakh in two instalments, mirroring the conditional relief structure approved in the cited precedent.
Holding and Implications
Appeal allowed in part; High Court’s order modified.
The stay on recovery of arrears will continue only if Respondent 1:
- Deposits ₹12.5 lakh within three months, and
- Deposits the remaining ₹12.5 lakh within the subsequent three months.
Failure to meet either deadline will automatically vacate the stay, empowering the Nigam to disconnect supply forthwith. Respondent 1 must also pay current electricity charges on time. The decision affects only interim relief and sets no precedent on the validity of Clause 21-A, which remains to be adjudicated by the High Court.
Order
1. Heard learned counsel for the parties.
2. Leave granted.
3. By the impugned order, the High Court of Punjab and Haryana, while issuing notice of motion in the writ petition filed by Respondent 1 for striking down Clause 21-A of the terms and conditions of supply framed under Section 49 read with Section 79(j) of the Electricity (Supply) Act, 1948, unconditionally stayed the demand of the arrears of electricity dues raised by the appellant Nigam and directed it to release electricity connection to Respondent 1.
4. The learned counsel for the appellant relied upon the judgment of this Court in Dakshin Haryana Bijli Vitran Nigam Ltd. v. Paramount Polymers (P) Ltd. (2006) 13 SCC 101 and argued that the High Court was not justified in granting unconditional stay ignoring the fact that in terms of Clause 21-A of the terms and conditions of supply, Respondent 1 was required to pay the arrears of electricity dues amounting to rupees eighty-five lakhs twenty-one thousand and two hundred thirty-five.
5. The learned counsel for Respondent 1 argued that in the absence of any stipulation in the auction notice his client cannot be burdened with the dues of electricity payable by Respondent 3. He submitted that the judgment relied upon by the learned counsel for the appellant is not applicable to the present case because validity of Clause 21-A of the terms and conditions of supply which is under challenge in the writ petition was not the subject-matter of challenge in that case.
6. We have considered the respective arguments.
7. Before proceeding further, it is apposite to mention that, on 4-8-2008, we had, after taking note of the undertaking given by the counsel for Respondent 1 that his client will deposit a sum of rupees ten lakhs within two days, directed the appellant Nigam to restore electricity connection to the establishment of Respondent 1. We have been told that the aforesaid sum of rupees ten lakhs has been deposited and the electricity connection has been restored.
8. Since the writ petition filed by Respondent 1 questioning the validity of Clause 21-A of the terms and conditions of supply is pending before the High Court, it is not proper for us to express any opinion on the merits of the case. However, we are convinced that the impugned order is legally unsustainable.
9. In Dakshin Haryana Bijli Vitran Nigam Ltd. (2006) 13 SCC 101 this Court interpreted Clause 21-A of the terms and conditions of supply, distinguished the earlier judgment in Isha Marbles v. Bihar SEB (1995) 2 SCC 648 and directed the respondent to pay a sum of rupees twenty-five lakhs with a further direction that, in the event of deposit of the amount, the supply of electricity will not be disconnected. In the present case, a sum of rupees ten lakhs has already been deposited by Respondent 1. Therefore, we direct the said respondent to deposit a further sum of rupees twenty-five lakhs with the Nigam. Out of this, rupees twelve lakhs and fifty thousand shall be deposited within three months and the balance amount shall be deposited within three months thereafter.
10. Accordingly, the appeal is allowed in part and the impugned order is modified by directing that the stay granted by the High Court shall remain operative if Respondent 1 deposits rupees twelve lakhs and fifty thousand within three months and the remaining amount within three months thereafter. If Respondent 1 fails to deposit either of the instalments, the stay order passed by the High Court shall stand automatically vacated and it will be open to the appellant Nigam to disconnect the supply of electricity forthwith. So far as the current electricity charges are concerned, Respondent 1 shall deposit the same within the time permissible under the law and, in case it fails to do so, the Nigam would be at liberty to disconnect the supply of electricity.
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