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

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

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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;

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(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

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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

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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.

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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

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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

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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

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