Office of the Chief Engineer (Commercial) Maharashtra State Electricity Board “Prakashgad”, Bandra (East), Mumbai -400051. Tel.:(P) 26474753 (O) 26474211 Fax: (022) 26472366

REF.: PR – 3/COS/031231                                                           DATE:25/09/2003

DEPARTMENTAL CIRCULAR (COMMERCIAL) NO.: 684

Subject: Power supply to closed / sick industrial units

Ref.:
1) Departmental Circular (Commercial) No. 518 dated 18/06/1993,
2)   Departmental Circular (Commercial) No. 607 dated 19/12/1998.

            Attention is invited to the Circulars referred herein above. As per the Circular no. 518, it was prescribed that the prospective consumer / entrepreneur purchasing a closed / sick unit in auction from M. S. F. C. / SICOM, in exercise of powers under Section 29 of the State Financial Corporation Act, 1957, would be given following options:

1)                  EITHER to pay up to date arrears due & payable by the closed / sick industrial unit, including minimum charges, delayed payment charges, interest, etc. as on the date of reconnection of power supply, to pay the reconnection charges and further to complete all such formalities as may be required as per the prevailing provisions, including submission of fresh Test Report, execution of fresh Agreement, submission of No Objection Certificate, in case of change of purpose of power supply, etc.

2)                  OR to apply for fresh connection and thereby avail new connection after completing the prescribed formalities as may be required, to pay Service Connection Charges, Service Line Charges, Security Deposit, etc. as per the prevailing provisions.

            It was further prescribed in the said Circular that

a)                  The authority otherwise competent to sanction & release of fresh power supply would be the competent authority to take necessary action depending upon the option as may be exercised by the new entrepreneur auction purchasing a closed / sick industrial unit, and

b)                  In the event the new entrepreneur opts for fresh power supply as per (2) above, he will not be liable to pay outstanding arrears of the outgoing consumer.

            Subsequently, as prescribed by Circular no. 607, the provisions as above were withdrawn with immediate effect and instructions were issued that the reconnection of power supply or fresh power supply will be released only after all the up to date arrears of the outgoing consumer are paid by the incoming consumer.

            The said Circular no. 607 was however challenged by some of the consumers as well as M/s. SICOM by way of filing Writ Petitions in the High Court and the High Court; Mumbai by its judgement dated 13/12/2002 has quashed the said Circular no. 607. The Board has further contested the said decision of the High Court, Mumbai and a Petition has been filed in the Supreme Court. However, the Hon’ble Supreme Court has so far not stayed the operation of the said judgement of the High Court, Mumbai.

            In such circumstances, it is once again decided, at least at this stage, to allow the incoming consumer, who has auction purchased a closed / sick industrial unit from financial institutions like M. S. F. C.; SICOM, etc. under Section 29 of the State Financial Institutions Act, to exercise either of the options prescribed by the Departmental Circular (Commercial) no. 518 dated 18/06/1993. The decision is however prospective and will be applicable from the issue of this Circular and further provided the incoming consumer submits an undertaking on Stamp Paper of Rs. 100/- thereby unconditionally agreeing to pay the arrears of the outgoing consumers, in case the Board succeeds in the Supreme Court. The draft of the Undertaking to be submitted by the consumer is enclosed with this Circular. It shall however be noted that, past cases where the incoming consumer has already paid the up to date outstanding arrears of outgoing consumer (before issue of this Circular) and shall not be reopened.

CHIEF ENGINEER (COMMERCIAL)

  UNDERTAKING

Whereas there existed an industry, M/s. _______________________________________, situated at ________________________________________________________, which has been auction purchased by M/s. _______________________________ from SICOM / MSFC / Other Financial Institution (Specify) under Section 29 of the State Financial Institutions Act.

And

Whereas the said M/s. _______________________________ had taken power supply from the Maharashtra State Electricity Board, which was disconnected by the M. S. E. Board on _____________, for default in payment of dues of the M. S. E. Board, amounting to Rs. _______________ as on ____________.

And

Whereas M/s. ______________________________ now desires reconnection of power supply at the same place,

And

Whereas the High Court of judicature at Bombay by its Judgment & Order dated 13/12/2002 has quashed the Circular No. 607 dated 19/12/1998 issued by the M. S. E. Board, which otherwise inter alia requires M/s. _____________________________________ (incoming consumer) to pay all the up to date outstanding of M/s. _________________________ (outgoing consumer) before reconnection of power supply,

And

Whereas the M. S. E. Board has approached the Supreme Court of India and has contested the said decision of the high Court, Mumbai & the matter is pending for decision before the Supreme Court,

And

Whereas M/s. ___________________________________ (incoming consumer) is in need of power supply,

            I, _______________________________, son of ____________________________, age ____ Years, residing at _____________________________________, authorized signatory on behalf of M/s. __________________________________________________ (incoming consumer), do here by undertake to pay all the up to date arrears / outstanding of M/s. ___________________________________________________ (outgoing consumer) in case the Maharashtra State Electricity Board succeeds before the Supreme Court in the above referred matter. I hereby further undertake to pay such amount within 30 days from intimation of the same; otherwise the Board will be at liberty to disconnect the power supply of M/s. ____________________________________________ without any further notice.

PLACE: ___________________

DATE: ___________________                             (__________________________________)

                                                                                      Authorized Signatory

                                                                                        For & on behalf of

                                                                        M/s. ________________________________