Summary
The electricity distributor could require the auction purchaser to clear the previous owner’s arrears before supplying electricity. The auction terms expressly placed existing dues on the purchaser and disclosed outstanding liabilities, while the supply conditions permitted refusal of both an existing and a fresh connection until arrears were paid. The sale deed’s title-related indemnity did not cover those electricity dues. The contrary High Court orders were set aside.
Issues
- Whether the auction purchaser was liable for the previous owner’s electricity arrears under the auction and supply terms.
- Whether requesting a fresh connection avoided the clearance requirement.
Held
- The auction notice had to be read as a whole. Its express allocation of statutory and electricity dues, coupled with the as-is sale and disclosed outstanding liabilities, put the purchaser on notice that those dues were additional to the sale consideration. The sale deed indemnified title defects and did not shift electricity liabilities to the vendor. (¶¶ 2, 3, 4, 11)
- Under clauses 5.9.6 and 8.4 of the applicable supply conditions, prior dues could prevent supply. Clause 8.4 covered both continuation of an existing connection and grant of a new one, so the distinction between connection and reconnection did not assist this purchaser. (¶¶ 5, 6, 12, 15)
- Electricity dues arising under statutory supply conditions are statutory rather than merely contractual. Where the auction expressly makes such dues the purchaser’s liability, whether quantified or not, the purchaser must pay them. Decisions involving different sale terms or regulations restricted to reconnection were distinguishable. (¶¶ 8, 9, 10, 12, 13, 14, 15, 16)
Result
Appeal allowed; High Court orders set aside. Distributor entitled to demand the last owner’s electricity arrears from the respondent purchaser. Parties to bear their own costs.