- (1.) In these writ petitions under Art. 32 of the Constitution of .India, three electric supply undertakings in the State of Tamil Nadu, namely, Vellore Electric Corporation Ltd, Nagapatam Electric Supply Co. Ltd., and Kumbakonam Electric .Supply Corporation Ltd., challenge the constitutional validity of the Tamil Nadu Private Electricity Supply Undertakings (Acquisition) Act, 1973, ('Act' for short) on the ground that the 'Act', which envisages the acquisition of the Electric Supply Undertakings of three petitioners, as violative of Arts. 14, 19(l)(f), 19(l)(g) and 31 of the Constitution. These writ petitions were heard along with Writ Petition (Civil) Nos. 457 and 458 of 1.972, pertaining to the acquisition of Tinsukhia Electric Supply-Co. Ltd., and Dibrugarh Electric Supply Co. Ltd., under the provisions of the Tinsukhia and Dibrugarh Electric Supply Undertakings (Acquisition) Act, 1973, (Assam Act 1973) and the main contentions touching the constitutionality of such State laws, providing for acquisition of private electricity undertakings - independently of and without recourse to the option to purchase envisaged by the terms of licences and under the provisions of Ss. 6, 7 and 7A of the Electricity Act 1910 - are considered in the main judgment in the said WP Nos. 457 and 458, separately rendered today.
(2.) The scheme and the broad features of The Tamil Nadu Private Electricity Supply Undertakings (Acquisition) Act, 1973, which received the assent of the President on 30th September, 1973, are that the "Act" enables and provides for the acquisition of the private undertakings engaged in the business of supplying electricity to the public other than those belonging to and are under the control of the State Electricity Board or the local authorities. Section 2 of the Act declares that the "Act" is for giving effect to the policy of the State towards securing of the Directive Principles, specified in Cls. (b) and (c) of Art. 39 of the Constitution of India. Section 3 is the interpretation clause. Section 4 empowers the State Government to declare, by order in writing. that any undertaking shall vest in Government on the date specified in such order the proviso to S. 4 enables the Government to modify, by advancing or postponing the date originally fixed in such order, or the modified date; or to cancel such order. The proviso is, however, subject to a limitation which is in terms following : "So, however, that no such order shall be modified or cancelled after the undertaking has vested in the Government but such cancellation shall not be deemed to prevent the Government from taking any proceeding de novo in respect of such undertaking under this Act." The mode of promulgation and the incidence and consequence of an order under sub-sec. ( 1) of S. 4. are envisaged in sub-secs. (3), (4) and (5) of Ss. 4 and 6 of the Act. Sub-sections (3),(4) and (5) of S. 4 provide : "(3) Every order under sub-sec.(1) shall be - (a) served on the licensee in the prescribed manner and (b) published in such manner as the Government may deem fit. (4) On the vesting date the undertaking, to which the order under sub-sec. ( 1) relates, shall subject to the provisions of S. 6. stand transferred to, and vest in, the Government. (5) Every licensee who, after the vesting date, was in possession of, or deriving any benefit from the undertaking vested in the Government under sub-sec. (1) shall be liable to pay to the Government, for the period. after such vesting, for which he was in such possession or deriving such benefit. an amount as compensation for the use occupation or enjoyment of that undertaking as the prescribed authority may fix in the prescribed manner. Such authority shall take into consideration such factors as may be prescribed.'" We shall refer to S. 6 and its impact at an appropriate stage later. Section 5 of the "Act- envisages the amount to be given to the licensee on whom an order has been served under S.4 and provides for its determination on two alternative basis - Basis (A) or Basis (B) as may be chosen by the licensee in the exercise of the option given under S. 8. Section 7(l) contemplates and requires the appointment of an "Accredited-Agent" by the licensee within three months of service of the order under S. 4. (1) Such accredited agent is required within one month of his appointment or with such further time as may be granted by Government, signify the .choice of the Basis for the determination of the Amount Section 8(2) says that the choice of the Basis once intimated shall not be open to revision except with the concurrence of the Government. 'Basis (A)' provides that the amount to be given shall be equivalent to 12 times of the average net annual profits of the undertaking during a period of any five account years at the option of the licensee within a period of seven consecutive account years immediately preceding the vesting date. 'Basis (B)' contemplates a different mode of determination of the amount. It provides for payment of the aggregate value of the sums specified in Cls. (i) to (ix) of sub-sec. (2) of S. 5. Section 10 speaks of the deduction that the Government is entitled to make from the amount. They are specified at Cls. (a) to(i) of S. 10. Section 11 provides for the manner of payment of the "Amount". Section 13(l) renders any dispute "in respect of any of the matters in Cls. (a) to (e) of S. 13(l) arbitrable. The arbitrator is required by S. 11(2), to be a District Judge or a person who is a retired District Judge or a retired High Court Judge. Chapter III of the Act, comprising Ss. 14,15, 16 and 17, contemplates and provides for the termination of agreements between the licensee on the one hand and the managing agent or the managing-director, as the case may be, on the other; the continuation under the Government or the Electricity board, of services of persons on the staff of the licensee taking an inventory of the assets and for information in regard to the documents maintained by the licensee and other incidental matters. Sections 18 and 19 of Chapter IV deal with offences, penalties and procedure therefor. Chapter V, comprising Ss. 20, 21, 22, 23 and 24, deals with miscellaneous matters. Two sections in Chapter V are of particular relevance. Section 22(i), inter alia, provides that no provisions of Electricity Act, 1910, or the Electricity Supply Act, 1948, in so far as such provisions are inconsistent with any of the provisions of the Act, shall have any effect. Section 23 refers to and deals with the action initiated under the earlier State law viz., the Tamil Nadu Electric Supply Undertakings (Acquisition) Act, 1954, (Tamil Nadu Act 29 of 1954) which is repealed by the 'Act'. Subsection (1) of S. 23 says that the said Act 29 of 1954 shall cease to apply to any undertaking as defined in S. 3(12) of the 'Act' which has "not vested with and taken possession of by the Government under the provisions of the 1954 Act" before the commencement of the 1973 Act. Sub-sections (2) and (3) of S. 23 envisage and provide for situations where some action had been initiated by the 1954 Act but such action had not culminated in the vesting of the undertaking and possession thereof being taken-over by Government. Subsections (2) and (3) of S. 23 provide : "(2) Notwithstanding anything contained in the 1954 Act, if, in pursuance of any order under sub-sec. (1) of S. 4 of the 1954 Act in respect of any undertaking as defined in S. 3(12) of this Act, the Government have not taken possession of such undertaking before the commencement of this Act that order shall lapse and be of no effect and such undertaking shall not vest and shall be deemed never to have vested in the Government under the 1954 Act and in respect of such undertaking it shall be lawful for the Government to make an order under sub-sec. (1) of S. 4 of this Act and the provisions of this Act shall accordingly apply to such undertaking." "(3) Notwithstanding anything contained in the- 1954 Act, where, in respect of any undertaking as defined in S. 3(12) of this Act. the Government have postponed the date of vesting under the proviso to sub-sec. (1) of S. 4 of the 1954 Act, that undertaking shall not vest, and shall be deemed never to have vested, in the Government under the 1954 Act, not withstanding the expiration of a period of one year from the date originally fixed under sub-sec. (1) of S. 4 of the 1954 Act and in respect of such undertaking it shall be lawful for the Government to make an order under sub-sec. (1) of S. 4 of this Act, and the provisions of this Act shall accordingly apply to such undertaking." The provisions of S. 23 acquire particular significance in the case of the Kumbakonam Electric Supply Corporation Ltd., and Nagapatam Electric Supply Co. Ltd., petitioners in W.Ps. 14 and 15 of 1974, as, indeed, proceedings for the acquisition of the undertakings of these two companies had been initiated under the 1954 Act but full effectuation thereof had been interrupted by the interlocutory orders made by courts in proceedings in which these two companies had challenged the validity of the 1954 Act. Section 23 of the present 'Act' seeks legislatively to set at naught such legal consequences as might come to be considered as ensuing from the action taken under the earlier 1954 Act. Some contentions urged in these cases centre round what the petitioners refer to as some irreversible, vested rights according to them under the earlier proceedings under the 1954 Act.
(3.) The Vellore Electric Corporation Ltd, petitioner in WP No. 5(N) of 1974, was granted on 14-5-1929 by the Government of the then presidency of Madras under the provisions of the Indian Electricity Act, 1910, ('1910 Act' for short), for the supply of electrical-energy within the municipal limits of Vellore town which was later extended to cover the adjacent area of Ranipet. Clause 12 of the licence envisages the option to the Government to purchase the licensee's undertaking on the expiry of 30 years from the commencement of the licence or if licence is renewed thereafter on expiration of every subsequent period of 20 years, during the continuance of the licence. At the relevant time when the order under S. 4(1) was made. the remaining period of the licence was up to 14-5-1979. The State Government in exercise of powers under S. 4(1) of the Act made an order dated 30-10-1973. served on the petitioner on 5-11-1973 fixing 1-12-1973 (which was later postponed to 7-1-1974) as the date of vesting.;