Bachawat, J. - (1.) The short question in this appeal is whether the proposed acquisition of the electrical supply undertaking of the appellant by the State of Kerala in pursuance of the notice, Ex. G. dated November 20. 1959 is authorised by S. of the Indian Electricity Act, 1910.
(2.) The appellant is the holder of a licence for the supply of electrical energy in Ernakulam and other places in Cochin. The licence was originally granted in the managing agents of the appellant under the Cochin Electricity Regulation III of 1102 then in force in Cochin and subsequently assigned to the appellant with the permission of the Cochin Government. On the merger of Travancore-Cohin with the Union of India, the Indian Electricity Act, 1910 was made applicable by the Part B States Laws Act, 1951 (Act III of 1951) to the Travancore-Cochin area and the Cochin Electricity Regulation stood repealed. The Electricity (Supply) Act, 1948 (Act 54 of 1948) was also made applicable to the 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 of 1948 any right and option to purchase the undertaking of the licensee under the Indian Electricity Act, 1910 was transferred to and vested in the Board. Now, the right or option to purchase the undertaking of a licensee under S. 7 (1) of the Indian Electricity Act, 1910 then in force was exercisable "on the expiration of such period, not exceeding fifty years, and of every such subsequent period, not exceeding twenty years as shall be specified in this behalf in the license." Sub-section (4) of S.7, provided: "Not less than two years' notice in writing of any election to purchase under this section shall be served upon the licensee by the local authority or the State Government, as the case may be." Clause 15 (a) of the license held by the appellant provides: "The option of purchase given by S. 7, subs. (i) of the Regulation shall first be exercisable on the expiration of 25 years from the commencement of this license and on the expiration of every subsequent period of ten years during the continuance of this license." 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, The date of the commencement of the license is December 3, 1935. The period of 25 years mentioned in cl. 15 (a) of the license expired on December 2, 1960. The last date for giving the two years notice of the election to purchase on the expiry of December 2, 1960 required under S. 7 (4) of the Indian Electricity Act, 1910 expired on December 2, 1958. On February 11, 1959, the State Electricity Board served on the appellant a notice, Ex. B, of its election to purchase the undertaking of the appellant on the expiry of December 2, 1960, but this notice not being in accordance with S. 7 (4) was of no legal effect.
(3.) By the Indian Electricity (Amendment) Act, 1959 (Act 32 of 1959) S.6 now 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 Electricity Act 1910 now in force reads: "6.(1) Where a license has been granted to any person not being a local authority, the State Electricity Board shall,- (a) in the case of license granted 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 license granted on or after commencement of the Indian Electricity (Amendment) Act., 1959 on exceeding twenty years and of every such subsequent period, not exceeding ten years, as shall be specified in this behalf in the license; have the option of purchasing the undertaking and such option shall be exercised by the State Electricity Board serving upon the licensee a notice in writing of not less than one year requiring the licensee to sell the undertaking to it at the expiry of the relevant period referred to in this sub-section. (2) Where a State Electricity Board has not been constituted, or if constituted, does not elect to purchase the undertaking the State Government shall have the like option to be exercised in the like manner of purchasing the undertaking. (3) Where neither the State Electricity Board nor the State Government elects to purchase the undertaking, any local authority constituted for an area within which the whole of the area of supply is included shall have the like option to be exercised in the like manner of purchasing the undertaking. 4. If the state Electricity Board intends to exercise the option of purchasing the undertaking under this section, it shall send an intimation in writing of such intention to the State Government at least eighteen months before the expiry of the relevant period referred to in subs. (1) and if no such intimation as aforesaid is received by the State Government the State Electricity Board shall be deemed to have elected not to purchase the undertaking. 5. If the state Government intends to exercise the option purchasing the undertaking under this section it shall send an intimation in writing of such intention to the local authority, if any, referred to in sub-s. (3) at least fifteen months before the expiry of the relevant period referred to in sub-s. (1) and if no such intimation as aforesaid is received by the local authority, the State Government shall be deemed to have elected not to purchase the undertaking. 6. Where a notice exercising the option of purchasing the undertaking has been served upon the licensee under this section, the licensee shall deliver the undertaking to the State Electricity Board, the State Government or the local authority as the case may be the expiration of the relevant period referred to in sub-s. (1) pending the determination and payment of the purchase price. 7. Where an undertaking is purchased under this section, the purchaser shall pay to the licensee the purchase price determined in accordance with the provisions of sub-s. (4) of S. 7A. ;