Indian Maize & Chemicals Ltd. Vs. State of U.P. & Ors  INSC 21
(13 January 1997)
RAMASWAMY, G.T. NANAVATI
O R D
E R Delay condoned.
petitioner is, through this petition, assailing the correctness of the order of
the Allahabad High Court, Lucknow Bench, made on July 26, 1996 in Writ Petition No. 2109 of 1996. The petitioner- U.P. State
Electricity Board on February
6, 1990 for the supply
of electric energy of 1650 KVA. The petitioner had executed an agreement and
also complied with the formalities for the supply of electricity in terms of
Indian Electricity Act, 1910. The petitioner claimed the rebate on the basis
that he had established the industry in an undeveloped area but we are not
concerned with that controversy. Admittedly, a sum of Rs. 49395 lacs was due
from the petitioner. On a demand raised by the Board on June 4, 1996 in that behalf, the petitioner
approached the High Court. The petitioner, with a view to avoid disconnection
had agreed with the Board on June 10,1996 for payment of above outstanding
amount in 12 monthly instalments and the Board had agreed for the same and
given re-connection subject to the petitioner paying the amount as agreed. The
petitioner after depositing one instalment, committed default in the payment.
Since the petitioner anticipated disconnection, it approached the High court
for the direction not to recover the amount putting forth the plea that the
petitioner is a sick industry and his claim for rehabilitation was pending
before B.I.F.R and, therefore, no action could be taken in that behalf. The
High Court has refused to grant the relief by the impugned order dated June 26, 1996. Thus, this special leave petition.
counsel for the petitioner has contended that the controversy is covered by the
judgment of this Court in C.E.S.C. Ltd. & Ors. vs. Bowrech Cotton mills Co.
Ltd & Ors.[1993
Supp. (1) SCC 451]. Therefore, the high Court was not right in relying upon
that court's earlier judgment in Modi spinning & Weaving Mills Co. Ltd. vs.
U.P.S.E.B & Ors.[AIR 1992 All. 247]. We find that the contention raised by
the leaned counsel is not correct in law. It is seen that in CESC Ltd. case,
this Court had expressly left open the question of the undertaking given and
the default committed and fulfilment thereof since that question was not raised
in the High Court as expressly mentioned in paragraph 3 thereof. With regard to
the delayed payment, surcharge etc.
direction issued by the High Court was modified in paragraph 4 and direction
was given to pay the amount in instalments as envisaged in paragraph 4 of the
judgment. as far as the arrears are concerned, since the first question was not
considered, this Court had held that since the matter was pending before the
seen that Section 22(1) of the sick Industrial Companies (Special provisions )
Act, 1985 envisages as under:
Suspension of legal proceedings, contract, etc.--(1) Where in respect of an
industrial company, an inquiry under section 16 is pending or any scheme
referred to under preparation or consideration or a sanctioned scheme is under
implementation or where an appeal under section 25 relation to an industrial
company is pending, then, notwithstanding anything contained in the companies
Act, 1956 (q of 1956), or any other law or the memorandum and articles of
association of the industrial company or any other instrument having effect
under the said act or other law, no proceedings for the winding up of the
industrial company or for execution, distress or the like against any of the
properties of the industrial company or for the appointment of a receiver in
respect thereof (and on suit for the recovery of money or for the enforcement
of any security against the industrial company or of any guarantee in respect
of any loans or advance granted to the industrial company) shall lie or be
proceeded with further, except with the consent of the Board or, as the case
may be, the Appellate authority.
reading of the above section would indicate that when the proceedings are
pending before the BIFR in respect of any matter referred to therein for
inquiry by the Board, the proceedings or order of execution, distress or the
like would be stayed until the proceedings get concluded before the BIFR or
would not be proceeded without the leave of the Board or appellate authority.
It is seen that under the Indian Electricity supply Act, one of the conditions
is that continued payment of the price of electrical energy supplied by the
Board is a condition for the condition for the continued supply and the default
committed in the payment thereof entails disconnection of the supply of
electrical energy, except in accordance with the procedure prescribed under the
contract or the regulation issued under the Indian Electricity supply Act.
Execution connotes pre-existing decree. It is true that any action for realisation
decision by BIFR or without its permission is prohibited. Enforcement or
compliance of the obligation under the contract or regulation for supply of
electrical energy by ordering payment of electrical energy is not and cannot be
considered to be execution of decree. Execution of the decree presupposes
existence of a decree of a competent Court and the decree- holder should take
steps to have it executed pending proceeding before or leaf BIFR. There is no
decree of court. since the petitioner had committed default and as a condition
for re-connection, agreed to pay the amount in instalments, he is liable to
comply with the undertaking given for supply of electrical energy. the
petitioner committed default in that behalf. so, it is not entitled to seek any
declaration or direction from the Court that since the matter is pending before
the BIFR, he would be untitled to the supply of electrical energy without the compliance
of the corresponding obligation of payment under regulations or of the contract
under the Indian Electricity supply Act. It is, therefore, not correct to say
that since the proceedings are pending before the BIFR, the electricity is
required to be supplied to the consumer without compliance of the conditions.
It is then sought to be contended that the authorities may take coercive steps
to recover the arrears. at this state, we need not go into the question.
special leave petition is accordingly dismissed.