1965 (2) TMI 100 - SC - Indian Laws

State Government's Acquisition Notice Invalid; Board's Election Deemed Valid

COCHIN STATE POWER AND LIGHT CORPORATION LTD. Versus STATE OF KERALA

The Court held that the State Government did not acquire the option to purchase the appellant's electrical supply undertaking as the State Electricity ... - Issues Involved:1. Validity of the notice for acquisition under Section 6 of the Indian Electricity Act, 1910.2. Interpretation of the vested rights of the appellant under the old Section 7(4) of the Indian Electricity Act, 1910.3. Applicability and interpretation of Section 6 of the Indian Electricity (Amendment) Act, 1959.4. Jurisdiction and rights of the State Electricity Board and the State Government under the amended Act.Issue-wise Detailed Analysis:1. Validity of the Notice for Acquisition under Section 6 of the Indian Electricity Act, 1910:The core issue in this appeal was whether the proposed acquisition of the appellant's electrical supply undertaking by the State of Kerala, as per the notice dated November 20, 1959, was authorized by Section 6 of the Indian Electricity Act, 1910. The appellant held a license for supplying electrical energy, and the notice in question was served by the State Government for the acquisition of this undertaking.2. Interpretation of the Vested Rights of the Appellant under the Old Section 7(4) of the Indian Electricity Act, 1910:The appellant argued that since the two years' notice required under the old Section 7(4) was not served, they acquired a vested right to hold the license until December 2, 1970. This vested right, according to the appellant, was not taken away by the new Section 6 introduced by the Indian Electricity (Amendment) Act, 1959. The Court examined whether the failure to serve the two years' notice under the old Section 7(4) conferred any vested rights on the appellant.3. Applicability and Interpretation of Section 6 of the Indian Electricity (Amendment) Act, 1959:The new Section 6, which replaced the old Section 7, required only one year's notice for the acquisition of the undertaking. The appellant contended that the new section did not apply to periods that had already expired or where the option could not be legally exercised due to the absence of the required notice under the old section. The respondent argued that the new Section 6 applied to licenses granted before its commencement and that the period of 25 years specified in the license was a valid period for exercising the option of purchase.4. Jurisdiction and Rights of the State Electricity Board and the State Government under the Amended Act:The Court had to determine whether the State Electricity Board or the State Government had the right to exercise the option of purchase. The appellant argued that since the Board had already elected to purchase the undertaking, the State Government had no right to do so. The respondent contended that the Board's failure to send an intimation to the State Government, as required by Section 6(4), meant that the Board had elected not to purchase, thereby vesting the option in the State Government.Judgment:The Court found merit in the appellant's fourth contention, concluding that the State Government did not acquire the option to purchase the undertaking under Section 6(2) of the Indian Electricity Act, 1910, because the State Electricity Board had already elected to purchase the undertaking. The Court held that the Board's failure to send the intimation required by Section 6(4) was excused due to the impossibility of compliance, as the relevant period expired less than 18 months after the new Section 6 came into force. Consequently, the Board's election to purchase the undertaking was valid, and the State Government's notice was without jurisdiction.Conclusion:The appeal was allowed, and the State of Kerala was restrained from taking any action under the notice dated November 20, 1959. The respondent was ordered to pay the appellant's costs in the Supreme Court, with each party bearing its own costs in the lower courts.