//
you're reading...
legal issues

Patna Electric Supply Company Limited (PESCO), was taken over by the appellant, Bihar State Electricity Board (BSEB), certain disputes arose regarding payment of compensation by BSEB to PESCO in respect of the assets of PESCO. This resulted in litigation and ultimately in C.A. No.2630 of 2 1982 this Court, while granting leave, directed that BSEB would pay to PESCO the purchase price on the basis of book-value in accordance with the provisions of the Indian Electricity Act, 1910. Since payments were not made by BSEB to PESCO in terms of the said directions, PESCO filed I.A. No.5 for appropriate directions to be given to BSEB in this regard.

Vidhansabha Building, Patna

Image via Wikipedia

 REPORTABLE

 IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

 I.A. NO. 5

 IN

 CIVIL APPEAL NO. 2630 OF 1982

Bihar State Electricity Board ... Appellant 

 Vs.

The Patna Electric Supply Co. 

Ltd. & Ors. Respondents

 O R D E R

1. After the respondent No.1, Patna Electric 

 Supply Company Limited (PESCO), was taken over 

 by the appellant, Bihar State Electricity Board 

 (BSEB), certain disputes arose regarding 

 payment of compensation by BSEB to PESCO in 

 respect of the assets of PESCO. This resulted 

 in litigation and ultimately in C.A. No.2630 of 

 2

 1982 this Court, while granting leave, directed 

 that BSEB would pay to PESCO the purchase price 

 on the basis of book-value in accordance with 

 the provisions of the Indian Electricity Act, 

 1910. Since payments were not made by BSEB to 

 PESCO in terms of the said directions, PESCO 

 filed I.A. No.5 for appropriate directions to 

 be given to BSEB in this regard.

2. On 8.1.2005, after noting that what was payable 

by BSEB to PESCO was the book-value and not the 

market value of the assets of PESCO, this Court, 

after taking into consideration the submissions of 

the respective parties, came to the conclusion that 

the net amount of compensation payable to PESCO 

worked out to 135.45 lakhs. Out of the said 

amount, a sum of 99.72 lakhs had already been paid 

by BSEB to PESCO, leaving a balance amount of 

35.74 lakhs payable by BSEB to PESCO. It was also 

noted that under the directions of this Court the 

 3

balance amount of 35.74 lakhs had been paid by 

BSEB to the Bank of India to liquidate the dues of 

PESCO.

3. In addition to the above, a further sum of 

36.59 lakhs was shown as liability in the accounts 

of PESCO. It was noted that it was not the case of 

BSEB that the said amount had been paid by it to 

the aforesaid Bank. On the other hand, it was 

noted that it was PESCO's case that this amount 

had been paid by it to the Bank of India and in 

support thereof a `No Objection Certificate' dated 

21.3.2001 issued by the Bank in favour of PESCO had 

been placed on record. On the basis of the 

aforesaid calculations and the submissions made on 

behalf of the respective parties, I.A. No.5 was 

disposed of with the following observations :

 (1) The amount of consumer dues 

 calculated while arriving at the book 

 value of the assets of PESCO cannot be 

 questioned by BSEB at this stage;

 4

 (2) PESCO is entitled to the sum of 

 Rs.36.59 lakhs provided it has made the 

 payment on that account to the Bank; and

 (3) PESCO is entitled to interest in the 

 manner above stated on filing requisite 

 material on record along with an affidavit 

 showing payment of interest.

4. Thereafter, the matter was taken up on several 

occasions to enable PESCO to prove that such 

payment had actually been made by PESCO to the Bank 

of India on account whereof the said amount was 

shown as a liability in PESCO's accounts. On 

26.3.2009, the Bank of India, Kolkata Main Branch, 

was directed to supply the statements relating to 

the cash credit account maintained by PESCO for the 

period commencing from 1973 till the closure of the 

account. Leave was given to the appellant to 

respond to the same once the statements were made 

available by the Bank. Ultimately, on 30.9.2010 it 

was submitted on behalf of the Bank that the 

information, as was required to be given, had been 

filed by way of separate affidavits and leave was 

 5

also granted to file an additional affidavit to 

place on record certain other documents.

5. The first affidavit affirmed on behalf of the 

Bank on 31.10.2006 mentions a final settlement 

arrived at between the Bank and PESCO, to the tune 

of 45.93 lakhs and with the interest accrued 

thereupon the amount became 48.34 lakhs. 

According to the Bank records, the said amount was 

paid by PESCO between 15.1.2001 to 19.12.2001. The 

second affidavit affirmed on behalf of the Bank 

indicates that the balance as was outstanding in 

the Cash Credit Account of PESCO, as on 5.2.1974, 

was 37,26,137.77. It was also made clear that a 

sum of 84,08,363/- had been received by the Bank, 

out of which BSEB had paid 38.74 lakhs and PESCO 

had paid 48,34,363/-. It is, therefore, clear that 

the Bank received two amounts, one from BSES and 

the other from PESCO. It is also clear that the 

amount of 35.74 lakhs paid by BSEB, which was the 

 6

balance of the book-value of the assets of PESCO, 

was pursuant to the directions given by the Court 

on account of the fact that the said amount had 

initially been paid by PESCO. It is also clear 

that the other amount of 48,34,363/- was paid by 

PESCO to the Bank and was the Cash Credit amount of 

PESCO's account with Bank of India, and which 

amount, together with interest, was payable to 

PESCO in terms of the order passed by this Court on 

8.11.2005.

6. This was in effect the substance of the 

submissions made by Mr. Puneet Jain, learned 

Advocate, appearing for PESCO. On the other hand, 

learned Additional Solicitor General, Mr. Gaurav 

Banerjee, submitted that once the total dues of 

PESCO had been assessed at 135.46 lakhs and the 

entire amount had been paid, including a sum of 

35.74 lakhs paid by BSEB to the Bank, nothing 

further remained outstanding to be paid to PESCO.

 7

7. We have carefully considered the submissions 

made on behalf of the respective parties and it is 

necessary to put an end to the controversy 

regarding the amount which PESCO is entitled to 

receive from the BSEB on account of its take over 

by the BSEB.

8. The figure of 135.46 lakhs was arrived at by 

this Court upon deducting all the liabilities from 

the book-value of the assets of PESCO, after taking 

into consideration the ad hoc payments made by BSEB 

to PESCO to the tune of 99.72 lakhs between 

1.4.1974 and 8.2.1980. This Court concluded that 

the net amount payable to PESCO was 35.74 lakhs, 

which, in fact, was due from PESCO to the Bank and 

which amount was ultimately liquidated by BSEB. 

The dues in relation to the said sum of 135.46 

lakhs, therefore, stood concluded on such payments 

being made. Further this Court also took notice of 

the sum of 36.59 lakhs in the liabilities column 

 8

of PESCO's account and the same was shown against 

cash credit with Bank of India. Ultimately, as 

indicated hereinbefore, this Court held that PESCO 

was also entitled to the sum of 36.59 lakhs, 

provided such payment had been paid by PESCO to the 

Bank.

9. One of the affidavits filed on behalf of the 

Bank, as referred to hereinabove, clearly indicates 

that the said sum of 48,34,363/-, had been paid by 

PESCO to the Bank. The third affidavit affirmed 

on behalf of the Bank on 30.9.2010, contains an 

annexure being a letter addressed to PESCO by the 

Bank of India certifying that PESCO had paid to the 

Bank a sum of 48,34,363/- between 15.1.2001 to 

19.12.2001 towards final settlement of dues to the 

Bank.

10. Accordingly, in terms of the order dated 

8.11.2005, PESCO is entitled to recover the said 

sum from BSEB, since it has been able to prove that 

 9

the amount had been paid by it to the Bank. 

Consequently, the directions given on 5.4.2011 for 

reimbursement of the aforesaid amount to PESCO, 

together with interest @ 6 per cent per annum, from 

19.12.2001 till the date of the order, in view of 

what has been discussed hereinabove, does not 

require any elaboration. The application for 

direction, is therefore, disposed of in terms of 

the order passed by this Court on 15.4.2011. The 

payment, if not made, shall be made within one 

month from the date of communication of this order.

 .............................................J.

 (ALTAMAS KABIR)

 .............................................J.

 (D.K. JAIN)

 .............................................J.

 (MARKANDEY KATJU)

New Delhi,Dated:01.09.2011

About advocatemmmohan

ADVOCATE

Discussion

Comments are closed.

Blog Stats

  • 2,897,184 hits

ADVOCATE MMMOHAN

archieves

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 1,907 other followers
Follow advocatemmmohan on WordPress.com
%d bloggers like this: