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CochIn State Power and Light Corporation Ltd. Vs. State of Kerala - Court Judgment

LegalCrystal Citation
SubjectElectricity
CourtSupreme Court of India
Decided On
Judge
Reported inAIR1965SC1688; [1965]3SCR187
ActsIndian Electricity Act, 1910 - Sections 6, 6(1), 6(2), 6(3), 6(4), 6(5), 7, 7(1), 7(2), 7(4) and 7A(4); Cochin Electricity Regulation, 1902; States Laws Act, 1951; The Electricity (Supply) Act, 1948 - Sections 71; Indian Electricity (Amendment) Act, 1959; Constitution of India - Article 133(1); Indian Electricity (Amendment) Act, 1958
AppellantCochIn State Power and Light Corporation Ltd.
RespondentState of Kerala
Excerpt:
.....sales adjustment committee v. crystal dairy ltd. [1933] l.r. a.c. 168. distinguished. - (2) where a state electricityboard has not been constituted, or if constituted, does not elect to purchasethe undertaking, the state government shall have the like option to beexercised in the like manner of purchasing the undertaking. (3) where neither the stateelectricity board nor the state government elects to purchase the undertaking,any local authority constituted for an area within which the whole of the areaof supply is included shall have the like option to be exercised in the likemanner of purchasing the undertaking. 6 is thaton failure of the board to give the notice prescribed by sub-s (4), the optionvested in the board under sub-s (1) of s......s. 7(4) of the indian electricityact, 1910 expired on december 2, 1958. on february 11, 1959, the stateelectricity board served on the appellant a notice, ex. b, of its election topurchase the undertaking of the appellant on the expiry of december 2, 1960,but this notice was not being in accordance with s. 7(4) was of no legaleffect. 5. by the indian electricity (amendment) act, 1959 (act 32 of 1959), s. 6now in force was substituted for the old s. 7 of the indian electricity act,1910, with effect from september 5, 1959. section 6 of the indian electricityact, 1910 now in force reads : '6. (1) where a license hasbeen granted to any person not being a local authority, the state electricityboard shall, - (a) in the case of a licensegranted before the commencement of the indian electricity.....
Judgment:

Bachawat, J.

1. The short question in this appeal is whether the proposed acquisition ofthe electrical supply undertaking of the appellant by the State of Kerala inpursuance of the notice Ex. G, dated November 20, 1959 is authorised by s. 6 ofthe Indian Electricity Act, 1910.

2. The appellant is the holder of a license for the supply of electricalenergy in Ernakulam and other places in Cochin. The license was originallygranted to the managing agents of the appellant under the Cochin ElectricityRegulation III of 1902 then in force in Cochin and subsequently assigned to theappellant with the permission of the Cochin Government. On the merger ofTravancore-Cochin with the Union of India, the Indian Electricity Act, 1910 wasmade applicable by the Part-B States Laws Act, 1951 (Act III of 1951) to theTravancore-Cochin area, and the Cochin Electricity Regulation stood repealed.The Electricity (Supply) Act, 1948 (Act 54 of 1948) was also made applicable tothe Travancore-Cochin area by the Part-B States Laws Act, 1951. On March 31,1957 the Kerala Electricity Board was constituted, and by s. 71 of Act 54 of1948, any right and option to purchase the undertaking of the licensee underthe Indian Electricity Act, 1910 was transferred to and vested in the Board.Now, the right or option to purchases the undertaking of a licensee under s. 7(1)of the Indian Electricity Act, 1910 then in force was exercisable 'on theexpiration of such period, not exceeding fifty years, and of every suchsubsequent period, not exceeding twenty years as shall be specified in thisbehalf in the license.' Sub-section (4) of s. 7 provided :

'Not less than two years' notice in writing of anyelection to purchase under this section shall be served upon the licensee bythe local authority or the State Government, as the case may be.'

3. Clause 15(a) of the license held by the appellant provides :

'The option of purchase given by Section 7,sub-section (i) of the Regulation shall first be exercisable on the expirationof 25 years from the commencement of this license and on the expiration ofevery subsequent period of ten years during the continuance of thislicense.'

4. Section 7(1) of the Indian Electricity Act, 1910 corresponds to s. 7(i)of the Regulation, that is to say, of the Cochin Electricity Regulation. Thedate of the commencement of the license is December 3, 1935. The period of 25years mentioned in clause15(a) of the license expired on December 2, 1930. Thelast date for giving the two years' notice of the election to purchase on theexpiry of December 2, 1960 required under s. 7(4) of the Indian ElectricityAct, 1910 expired on December 2, 1958. On February 11, 1959, the StateElectricity Board served on the appellant a notice, Ex. B, of its election topurchase the undertaking of the appellant on the expiry of December 2, 1960,but this notice was not being in accordance with s. 7(4) was of no legaleffect.

5. By the Indian Electricity (Amendment) Act, 1959 (Act 32 of 1959), s. 6now in force was substituted for the old s. 7 of the Indian Electricity Act,1910, with effect from September 5, 1959. Section 6 of the Indian ElectricityAct, 1910 now in force reads :

'6. (1) Where a license hasbeen granted to any person not being a local authority, the State ElectricityBoard shall, -

(a) in the case of a licensegranted before the commencement of the Indian Electricity (Amendment) Act,1959, on the expiration of each such period as is specified in the license; and

(b) in the case of a licensegranted on or after the commencement of the said Act, on the expiration of suchperiod not exceeding twenty years and of every such subsequent period, notexceeding ten years, as shall be specified in this behalf in the license;

have the option of purchasing theundertaking and such option shall be exercised by the State Electricity Boardserving upon the licensee a notice in writing of not less than one yearrequiring the licensee to sell the undertaking to it at the expiry of therelevant period referred to in this sub-section.

(2) Where a State ElectricityBoard has not been constituted, or if constituted, does not elect to purchasethe undertaking, the State Government shall have the like option to beexercised in the like manner of purchasing the undertaking.

(3) Where neither the StateElectricity Board nor the State Government elects to purchase the undertaking,any local authority constituted for an area within which the whole of the areaof supply is included shall have the like option to be exercised in the likemanner of purchasing the undertaking.

(4) If the State ElectricityBoard intends to exercise the option of purchasing the undertaking under thissection it shall send an intimation in writing of such intention to the StateGovernment at least eighteen months before the expiry of the relevant periodreferred to in sub-section (1) and if no such intimation as aforesaid isreceived by the State Government the State Electricity Board shall be deemed tohave elected not to purchase the undertaking.

(5) If the State Governmentintends to exercise the option of purchasing the undertaking under thissection, it shall send an intimation in writing of such intention to the localauthority, if any, referred to in sub-section (3) at least fifteen monthsbefore the expiry of the relevant period referred to in sub-section (1) and ifno such intimation as aforesaid is received by the local authority, the StateGovernment shall be deemed to have elected not to purchase the undertaking.

(6) Where a notice exercising theoption of purchasing the undertaking has been served upon the licensee underthis section, the licensee shall deliver the undertaking to the StateElectricity Board, the State Government or the local authority, as the case maybe, on the expiration of the relevant period referred to in sub-section (1)pending the determination and payment of the purchase price.

(7) Where an undertaking ispurchased under this section, the purchaser shall pay to the licensee thepurchase price determined in accordance with the provisions of sub-section (4)of section 7A.'

6. On October 24, 1959, the State Electricity Board served upon theappellant a notice Ex. D, of its election to purchase the undertaking on theexpiry of December 2, 1960. On October 29, 1959, the State Electricity Boardserved upon the appellant another notice, Ex. E, of its election. On November20, 1959, the State Government served upon the appellant a notice, Ex. G, ofits election to purchase the undertaking on the expiry of December 2, 1960. OnNovember 14, 1960, the appellant filed a writ petition in the High Court ofKerala impleading the State of Kerala and the Kerala State Electricity Boardand asking for the issue of appropriate writs and orders restraining them fromtaking any action pursuant to the notices, Exs. B, D, E and G. On December 20,1961, a learned single Judge of the High Court passed the following order :

'In view of the representation made before me byboth the learned Advocate-General appearing for the State, the 1st respondent,and Mr. Krishnaswami Iyengar, learned counsel appearing for the Kerala StateElectricity Board, the second respondent, that for the purpose of this writpetition, the notices issued by the Kerala State Electricity Board, Exs. B, Dand E can be ignored, it follows that neither the 1st respondent nor the 2ndrespondent has any jurisdiction or power to take any action on the basis ofExs. B, D or E. In view of the fact that I am upholding the action of the StateGovernment, who had issued the notice Ex. G, it follows that the 1st respondentalone is entitled to take further action under the Act, in pursuance of thenotice, Ex. G, issued and sent along with the covering letter, Ex. F on20-11-1959. It follows, subject to what is stated about Exs. B, D and E, thatthe writ petition has to be dismissed. There will be no order as tocosts.'

7. The effect of this order was that the State Electricity Board waived andabandoned all its rights of purchase of the undertaking under the notices, Exs.B, D and E, and neither the Kerala State Electricity Board nor the State ofKerala had any jurisdiction or power to take any action on the basis of thosenotices, and save as aforesaid, the writ petition was dismissed, and it washeld that the State Government was entitled to take further action under itsnotice, Ex. G. Aggrieved by this order, the appellant filed an appeal in theKerala High Court impleading the State Government only as the party respondent.The State Electricity Board did not file any appeal from the order of thelearned single Judge. By its judgment dated October 4, 1962, a Division Benchof the High Court dismissed the appeal. In paragraph 15 of its judgment, theBench observed :

'In its petition the appellant asked for reliefsboth against the State Government and the State Electricity Board. However, inthe course of the hearing of the petition, the Board gave up its claims underExts. B, D and E, and only the claim of the State Government under Ext. G wascanvassed. The petition was, in effect, allowed against the Board. The Boardhas not appealed and is not a party to the present appeal; and its notices maytherefore be ignored except to the extent that they may affect the rights ofthe State Government.'

8. The appellant now appeals to this Court under a certificate granted bythe High Court under Arts. 133(1)(a) and 133(1)(c) of the Constitution.

9. On behalf of the appellant, Mr. Vishwanath Sastry contended that (1) asthe two years' notice in writing of the election to purchase the undertaking onthe expiry of December 2, 1960 was not served on the appellant as required bythe old s. 7(4) of the Indian Electricity Act, 1910, the appellant acquired avested right to hold the license until the expiry of a further period of tenyears, that is to say, until December 2, 1970, and this vested right was nottaken away either expressly or by necessary implication by the new s. 6 of theIndian Electricity Act, 1910 introduced by the amending Act 32 of 1958; (2) theexpression 'on the expiration of each such period as is specified in thelicense' in the new s. 6(1)(a) means a period which has not expired and onthe expiry of which the option may be legally exercised, and since in theabsence of the two years' notice required under the old s. 7(4), the option ofpurchase on the expiry of December 2, 1960 could not be legally exercised, thenew s. 6(1) did not confer any option of purchase on the expiry of December 2,1960 and the first option exercisable under the new s. 6(1) would be on theexpiry of December 2, 1970; (3) sub-sections (4) and (5) of the new s. 6 showthat the period on the expiry of which the option under sub-s (1) of s. 6 isexercisable, is a period which would expire at least 18 months after the cominginto force of the new s. 6, that is to say, after September 5, 1959, and sincethe period expiring on December 2, 1960 is not such a period, the new s. 6(1)did not confer any option of purchase on the expiry of December 2, 1960; and(4) in any event, the State Electricity Board having duly elected to purchasethe undertaking on the expiry of December 2, 1960, the State Governmentacquired no option of purchase under sub-s (2) of s. 7 of the IndianElectricity Act, 1910.

10. On behalf of the respondent, Mr. V. P. Gopalan Nambiar, theAdvocate-General of Kerala, contended (1) that the absence of two years' noticeunder the old s. 7(4) of the Indian Electricity Act, 1910 did not confer uponthe appellant a vested right to hold the license until the expiry of December2, 1970, and the immunity from compulsory purchase under the old s. 7 arisingfrom the non-service of the requisite two years' notice could be, and, in fact,was taken away by the new s. 6, which required only one year's notice ofintention to purchase the undertaking; (2) assuming that the appellant acquiredunder the old s. 7 a vested right to hold the license until December 2, 1970,such vested right was taken away by the new s. 6, which expressly applies tolicenses granted before its commencement, and the period of 25 years is aperiod specified in as the license on the expiry of which the option ofpurchase was legally exercisable; (3) sub-sections (4) and (5) of the new s. 6did not cut down the plain meaning of sub-s (1) of the section and the optionon the expiry of the period of 25 years was vested under sub-s (1) of s. 6, thoughthis period did not expire 18 months after September 5, 1959; and (4) as theState Electricity Board did not send to the State Government any intimation inwriting of its intention to exercise the option on the expiry of December 2,1960 as required by sub-s (4) of s. 6, the Board must be deemed to have electednot to exercise this option, and consequently by sub-s (2) of s. 6, the StateGovernment is vested with the option.

11. We think that the fourth contention of Mr. Viswanatha Sastry is sound, andshould be accepted. Assuming, without deciding, that the option of purchasingthe undertaking on the expiry of the period of 25 years specified in thelicense was available under sub-s (1) of s. 6, such option vested in the StateElectricity Board, and as the Board duly elected to purchase the undertaking,the State Government acquired no right or option of purchasing the undertakingunder s. 6. On this ground alone, the appeal should be allowed, and in thisview of the matter, we do not think it necessary to express any opinion on theother contentions urged before us. As far as the State Electricity Board isconcerned, it has abandoned and waived its option of purchase on the expiry of25 years.

12. Sub-section (1) of s. 6 expressly vests in the State Electricity Boardthe option of purchase on the expiry of the relevant period specified in thelicense. But the State Government claims that under sub-s (2) of s. 6 it is nowvested with the option. Now, under sub-s (2) of s. 6, the State Government wouldbe vested with the option only 'where a State Electricity Board has notbeen constituted, or if constituted, does not elect to purchase theundertaking.' It is common case that the State Electricity Board was dulyconstituted. But the State Government claims that the State Electricity Boarddid not elect to purchase the undertaking. For this purpose, the Stategovernment relies upon the deeming provisions of sub-s (4) of s. 6, andcontends that as the Board did not send to the State Government any intimationin writing of its intention to exercises the option as required by thesub-section, the Board must be deemed to have elected not to purchase theundertaking. Now, the effect of sub-s (4) read with sub-s (2) of s. 6 is thaton failure of the Board to give the notice prescribed by sub-s (4), the optionvested in the Board under sub-s (1) of s. 6 was liable to be divested.Sub-section (4) of s. 6 imposed upon the Board the duty of giving after thecoming into force of s. 6 a notice in writing of its intention to exercise theoption at least 18 months before the expiry of the relevant period. Section 6came into force on September 5, 1959, and the relevant period expired onDecember 3, 1960. In the circumstances, the giving of the requisite notice of18 months in respect of the option of purchase on the expiry of December 2,1960, was impossible from the very commencement of s. 6. The performance ofthis impossible duty must be excused in accordance with the maxim, lex noncogit ad impossibilia (the law does not compel the doing of impossibilities),and sub-s (4) of s. 6 must be construed as not being applicable to a case wherecompliance with it is impossible. We must therefore, hold that the StateElectricity Board was not required to give the notice under sub-s (4) of s. 6in respect of its option of purchase on the expiry of 25 years. It must followthat the Board cannot be deemed to have elected not to purchase the undertakingunder sub-s (4) of s. 6. By the notice served upon the appellant, the Board dulyelected to purchase the undertaking on the expiry of 25 years. Consequently,the State Government never became vested with the option of purchasing theundertaking under sub-s (2) of s. 6. The State Government must, therefore, berestrained from taking further action under its notice, Ex. G, dated November20, 1959.

13. In the result, the appeal is allowed, and the respondent State of Keralais restrained from taking any action under the notice, Ex. G, dated November20, 1959. The respondent shall pay to the appellant the costs in this Court. Wedirect the parties to pay and bear their own costs in the Courts below.

14. Appeal allowed.


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