Libertatem Magazine

Payment of Arrears of Electricity Charges for the Property Is a Requirement for Permitting the Power Connection: Karnataka High Court

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The Dharwad Bench of Karnataka High Court in a recent case held that the payment of the reasonable arrears of electricity charges are necessary to be paid even by the new owner of a property to get access to power connection for that premises. 

Facts of the case   

Here, the petitioner purchased a property at a public auction of approximately 119 acres & 62 cents out of a total of 800 acres of land. The property that the petitioner bought was industrial land that had all its equipment existing on the premises. 

However, when the petitioner requested the electricity department for approving the electricity supply of the premises, the respondent answered that the former property owner had a power supply for the total land and that the supply was disconnected earlier due to the non-payment of arrears, that then quantified at Rs.17.36 crore (now almost doubled) and therefore, unless the same is cleared, the department cannot sanction the power supply. 

Arguments from the side of the Petitioner 

The petitioner argued that the arrears of power supply costs are not burdensome and thus the purchaser or in particular the current owner, cannot be burdened with such obligation. 

In addition to that, he also put forward the contention that as the predecessor-in-title had the installation of power supply in all its premises, which in all amounted to about 800 acres, and here, the petitioner had purchased just approximately 15% of this, i.e., 119 acres & 62 cents, he cannot be expected to pay all the arrears estimated at Rs.21.63. 

Arguments from the side of the Respondent  

Here, the respondent replies that it is not an issue of coercive recovery, but only a necessary condition for the access of power supply to the property in question. The respondent backed his argument by drawing attention towards clause 4.09 (iv) of the “Policy Conditions for the Supply of Electricity to Distributors in the State of Karnataka” that states the said rule. 

Court’s Observation  

The court, by observing a Supreme Court judgement, marked that the transferee of the premises does not actually suffer the dues of electricity supply charges as a burden due to the lack of privity of contract.

However, the Supply Company can still impose that the clearance of the dues either on the previous owner or on the new owner in the possession because it is an essential condition for seeking a fresh connection as these arrears are considered as statutory dues.

The court further said that the interpretation of premises in the policy does not imply that the owner should pay for the arrears of another’s installation that is not owned by him. 

The decision of the Court 

After observing all the circumstances, the court approved this appeal in parts by deciding that the calculation of arrears cannot contain such unreasonable costs that are to be paid by the petitioner and therefore, the responders shall examine the allocation of liability for the arrears in issue within a limit of four weeks and examine the request for electricity supply within the following four weeks for that determination. 

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