- (1.) The Madras Electric Supply Corporation Ltd., later referred to as the company, was incorporated under the Companies Acts, 1862-1900, on January 27, 1906, with the object of carrying on in India the business of an electric light and power undertaking in all its branches. The undertaking was carried on under three licences granted by the Government of Madras. Under the first two licences the local authority, with the sanction of the local government, had an option to purchase such portion of the undertaking as was in the area for which it was constituted, and a similar option was given to the local government if the local authority did not elect to purchase. Under the third licence the Governor-General in Council had the option to purchase. The option was exercisable in each case on August 29, 1947. The company carried on its business until that date. Notices to exercise the options were duly given
(2.) On August 27, 1947, an agreement was entered into between the Government of Madras and the company, the effect of which is stated in paragraph II of the case : ". . . it was declared and agreed (inter alia) as follows :- Clause I : that the Government of Madras and the company agreed to entrust the valuers with the work of valuation of the physical assets to be purchased by the government and to be sold by the company : Clause 2 : that the valuation to be made by the valuers should be in conformity with the first proviso to section 7(1) of the Indian Electricity Act, 1910. For the removal of doubts, it was declared that the company should not be eligible for any soluation to be added to such valuation in accordance with the second proviso to the said section 7(1) for determining the purchase price :... Clause 7 : that the company should hand over the undertaking to the government and the government should take over the undertaking from the company at the commencement of August 29, 1947."
(3.) There followed a supplemental agreement of August 29, 1947, by which it was witnessed : - (1) that the company had on the date of execution thereof handed over physical possession of the lands, buildings, works, materials and plant suitable of and used by by the company for the purpose of the undertaking; (2 ) that the company acknowledged receipt of certain moneys (being a payment on account of the purchase price, provided for in the principal agreement of August 27, 1947); (3) that the company undertook to execute and register in favour of the Government of Madras a proper deed of conveyance and assignment of the lands, buildings, fixed machinery and plant.;