A clear distinction must be drawn between fresh application and application for transfer, both under the electricity law of the State as well as of the Electricity Act, 2003. While a transferee may be held liable for the dues of the transferor as a precondition for restoration of supply, as envisaged by these laws, the same cannot be a condition precedent for a fresh applicant who buys the same premises. The Supreme Court, in Special Officer, Commerce, North Eastern Electricity Company of Orissa (NESCO) and Another v.Raghunath Paper Mills Private Limited and Another found that the Respondent had lawfully purchased the paper mill of Konark Paper and Industries Ltd, a company in liquidation, from the official liquidator on an ‘as is where is’ basis that precluded assumption of any dues or liability. The electricity company, however, seized the opportunity to squeeze some Rs 79 lakh due to it from the respondent. The Court upheld the Orissa High Court verdict that power dues of a liquidated company could not be claimed from a buyer of a property on ‘as is where is’ basis.

(The author is a New-Delhi-based chartered accountant.)

(This article was published on December 4, 2012)
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