Authority: High Court of Jharkhand, Ranchi

Order Date: 04.08.2026

Case Overview

  • Petitioners: M/S Mangalam Ispat, a partnership firm, represented by partners Vinay Kumar Agrawal and Ankur Kumar Agrawal.
  • Respondents: Damodar Valley Corporation (DVC) and its senior officials (Chairman‑cum‑MD, Chief Engineer‑I (Commercial), Senior General Manager (Commercial), Deputy General Manager (Commercial)).
  • Nature of proceedings: Two writ petitions (W.P.(C) No. 2089 of 2019 and W.P.(C) No. 2639 of 2025) seeking quash of demand notices for electricity arrears and grant of fresh electrical connection.
  • Background: Mangalam Ispat purchased movable and immovable assets of M/s Shree Hanuman Alloys Pvt. Ltd. in a 2018 e‑auction conducted by Punjab National Bank. The previous owner had outstanding electricity dues of Rs 4,92,51,765. DVC refused a fresh connection until dues were cleared, issuing a demand letter dated 24‑04‑2019. The petitioner paid installments under a court‑ordered schedule and obtained a connection in 2019. In 2025 DVC issued a fresh demand of Rs 1,34,03,401 for arrears covering FY 2006‑2012, citing a tariff revision.
  • Petitioner’s arguments: The auction purchase was “as‑is‑where‑is” with no nexus to the erstwhile consumer; Clause 6.10(a) of the Jharkhand State Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2015 applies, preventing DVC from recovering prior owner dues. Cited Supreme Court precedents (Isha Marbles, Paschimanchal Vidyut, Haryana SEB, K.C. Ninan, etc.).
  • Respondent’s arguments: Reliance on Clause 5.3.3 of the same Regulations, asserting that the purchaser must obtain a “no‑dues certificate” and is liable for outstanding dues.
  • Admitted facts: The property was acquired through auction; dues relate to the erstwhile owner; petitioner has no relationship with the former owner; both parties agree the Regulations govern the matter; the dispute centers on which clause applies.

Analysis

  • Clause 5.3.3 applies to direct purchases between seller and buyer where the buyer must verify and obtain a “no‑dues certificate.”
  • Clause 6.10(a) applies when the property is transferred by court/authority decree (including public auction) and the new occupant has no nexus with the previous consumer; in such cases the distribution licensee must supply electricity without recovering the prior arrears.
  • The court held that the petitioner’s acquisition via public auction falls squarely under Clause 6.10(a); therefore Clause 5.3.3 is inapplicable.
  • Consequently, DVC cannot recover the Rs 4.92 cr demand (2019) nor the Rs 1.34 cr tariff‑revision demand (2025) from the petitioner.

Final Outcome

  • Both writ petitions are allowed.
  • The demand notice dated 01.02.2025 (letter No. Coml./arrear/JH/2006‑2012/340308) is quashed.
  • DVC is directed to refund the entire amount deposited by the petitioner (originally paid in installments to secure connection) in five equal quarterly installments, the first installment to be paid six weeks from the date of this order.
  • All pending interlocutory applications, if any, are disposed of.

Topics: Electricity Dues, Auction Purchaser Liability