Amit Products (India) Ltd. v. Chief Engineer (O & M) Circle

Amit Products (India) Ltd. v. Chief Engineer (O & M) Circle

Citation: IV (2005) CPJ 30 (SC)

Summary of Facts:  The appellant/complainant, Amit Products (India) Ltd. filed an application for getting electricity connection, which was rejected by the respondent Maharashtra State Electricity Board (MSEB). MSEB insisted on clearance of all arrears of electricity charges payable by M/s Amar Amit Jalna Alloys Pvt. Ltd, which was the previous consumer. The appellant company contended that they were not liable to pay the electricity charges payable by M/s Amar Amit Jalna Alloys Pvt. Ltd. as the company was a distinct and separate entity, which had nothing to do with M/s Amar Amit Jalna Alloys Pvt. Ltd. However, MSEB rejected the contention and did not provide electricity to the appellant company. Aggrieved with that the appellant company filed a writ petition before the Bombay High Court requesting for power supply to its factory contending that it is a separate company situated at a separate portion of the property and the insistence of the MSEB to pay the arrears of electricity charges to be payable by M/s Amar Amit Jalna Alloys Pvt. Ltd. and the refusal to give supply was arbitrary and violative of Articles 14 and 19 (1) (g) of the Constitution. The appellant approached Supreme Court contending that the directors and the shareholders of the company were different from that of the M/s Amar Amit Jalna Alloys Pvt. Ltd., they had nothing to do with the present company, and the whole corporate entity has been changed.

Background History: The Bombay High Court held that the appellant company was not an independent entity having no concern with the previous defaulter.

Issue(s): Whether the appellant company was the same corporate entity as M/s Amar Amit Jalna Alloys Pvt. Ltd. and liable to pay the previous electricity charges?

Holding: The Supreme Court held that by mere changing of the members of the Board of Directors of the company or by changing the shareholding pattern; the company has not undergone any change.

Rationale: The Supreme Court observed that the same company wanted the electricity connection without making any payment towards the electricity charges payable by the previous consumer. The matter was dealt in detail by the High Court and it was held that the appellant company was none other than the sister concern of M/s Amar Amit Jalna Alloys Pvt. Ltd. and was representing the same consumer who had committed the default and that Condition 23 (b) of the Conditions of Miscellaneous Charges for supply of electricity energy would apply to the appellant company.