The court issued the directive on an appeal filed by the Kerala State Electricity Board (KSEB) against a single judge's directive to the board to restore the electricity connection to the KWA's office in Malappuram even before paying the arrears due to it.
The KSEB contended that Rs.232 crore was due from the KWA towards electricity charges as on September 30. In fact, the KSEB was facing an acute financial crisis. The KSEB took loans whenever the arrears went up. As a result, it had to pay a huge amount as interest, which would be passed on to the consumer. In fact, the defaulters among domestic customers were very few. The biggest defaulter had been the KWA. In a one-time settlement in 2008-09, the KSEB had waived arrears to the tune of Rs.324 crore. It was in public interest that the KSEB had refrained from disconnecting the electricity supply to the pump houses of the KWA.
The court said that it agreed with the contention of the KSEB that it would face a severe financial crisis if the authorities did not pay the amount due to it. However, the solution was not to disconnect power supply to the offices of the KWA. The Bench observed that the KWA lacked liquidity, which could be attributed to mismanagement. It was for the government to find a solution to the problem.