Electricity dues of previous occupant — Demand from purchaser of premises — Electricity Act, 2003 section 43(1).

The petitioner had challenged the correctness of two letters issued by Chhattisgarh State Power Distribution Co. Ltd. respondent No. 1, for depositing Rs.48,13,749, the amount of outstanding dues of electricity consumption by Kedia Distilleries, the earlier owner and occupier of the premises purchased by petitioner in auction-sale. The payment was called as a condition precedent for supplying new temporary connection to the premises now occupied by petitioner No. 1 as an auction-purchaser.

The petitioner contended that it had purchased the premises in auction-sale free from all encumbrances; therefore, imposing the condition of pre-deposit of the outstanding dues of Kedia Distilleries on the petitioner was not in accordance with law. The petitioner also contended that the dues of Kedia Distilleries were time-barred dues and they are not recoverable from the petitioner.

The Court observed that the Supreme Court in the case of Haryana SEB AIR 2010 SC 3835 concluded that the previous arrears do not constitute a charge over a property and in general law a transferee of the premises cannot be made liable for the dues of the previous owner/occupier, but if statutory rules or terms and conditions of supply, which are statutory in character, authorise the supplier of electricity to demand such dues from the purchaser claiming reconnection or fresh connection of electricity, the arrears due by the previous owner can be recovered from the purchaser. Therefore, so long as the provision is prevailing in the Supply Code, 2005, the demand made by the respondent No. 1 cannot be held to be illegal or arbitrary merely on account of challenge to the above provisions of the Supply Code.

The Court further observed that the rules of limitation are not meant to destroy the rights of the parties. Section 3 of the Limitation Act only bars the remedy, but does not destroy the right which the remedy relates to. Though the right to enforce the debt by judicial process is barred u/s.3 read with the relevant article in the Schedule, the right to debt remains. The time-barred debt does not cease to exist by reason of section 3. Only exception in which the remedy also becomes barred by limitation is that the right itself is destroyed. In Khadi Gram Udyog Trust v. Ram Chandraji Virajman Mandir, (1978) 1 SCC 44, it was observed that a debt may be time-barred, it would still be a debt due. Though the remedy may be barred, a debt is not extinguished. The petition was dismissed.