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New Electricity connection to new owner for property purchased in SARFAESI auction – Refusal for non payment outstanding dues of previous owner

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On 23.11.2023, the sale certificate was issued to the petitioner, in pursuance of the auction of the property of M/s. Ankur Drugs Private Ltd under SARFAESI and purchased by the petitioner for Rs.30,69,85,140/-.

Auction sale certificate shows that the petitioner secured asset “free from all encumbrances”.

The petitioner applied for new electricity connection.   By the letter dated 2.3.2024 the request of the petitioner for new electricity connection was rejected on the ground that it has to clear outstanding dues of Rs.20,43,837/- of previous owner.

HELD that the Electricity Act 2003 has statutorily clarified the position that electricity supply is with respect to the consumer and when a new consumer or occupier of the premises applies for electricity under Section 43 of the said Act, it will constitute a fresh connection regardless of the fact that the premises for which the electricity is sought was being supplied with electricity previously.

Whether electricity dues of previous owner on are “charge” on the property / premises.   Section 100 of the Transfer of Property Act 1882 contemplates charge by act of parties and another by operation of law.  A charge cannot be enforced against a transferee if they have no notice of the same, unless the requirement of such notice has been dispensed with by law.   The Electricity Act of 2013 does not provide that the electricity arrears would constitute a “charge” on the property and such a charge shall be enforceable against a transferee without notice.  However, the Electricity Corporation can create a charge by framing subordinate legislation or statutory conditions of supply enabling recovery of electricity arrears from a subsequent transferee.

Judgment dated 4.4.2024 of Himachal Pradesh High Court in CWP No.2585 of 2024 of M/s. Pure & Cure Healthcare Pvt Ltd Vs. HPSEBL

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