DAKOR UMRETH ELECTRICITY COMPANY LIMITED Vs. STATE OF GUJARAT

JUDGEMENT

(1.) This petition raises a question as to the constitutional validity of certain provisions of the Indian Electricity Act 1910 (herein after referred to as the Electricity Act). On 1st March 1940 a licence was granted to one B. D. Desai by the Government of Bombay under sec. 3(1) of the Electricity Act to supply electrical energy within the area comprised in the municipal limits of Dakor and Umreth. Sec. 7(1) of the Electricity Act as it then stood provided omitting portions immaterial that Where a license has been granted to any person not being a local authority and the whole of the area of supply is included in the area for which a single local authority is constituted the local authority shall on the expiration of such period not exceeding 50 years and of every such subsequent period not exceeding twenty years as shall be specified in this behalf in the license have the option of purchasing the undertaking.

(2.) Before we set out the grounds on which the impugned notice is challenged on behalf of the petitioner it would be convenient at this stage to refer to some of the relevant provisions of law bearing on the points in controversy between the parties. turning first to the Electricity Act sec. 3 provides that the State Government may after consulting the State Electricity Board grant a license to any person to supply energy in any specified area and also to lay down or place electric supplylines for the conveyance and transmission of electrical energy. Clause (e) of subsec. (2) of this section says that the grant of a license for any purpose shall not in any way hinder or restrict the grant of a license to another person within the same area of supply for a like purpose. Sec. 4 deals with revocation of license and provides that the State Government may if in its opinion the public interest so requires revoke a license in any of the cases specified in the section Sec. 5 lays down the effect of revocation of license and omitting portions immaterial it says: (1) Where the State Government revokes under sec. 4 subsec. (1) the license of a licensee the following provisions shall have effect namely:- (a) the State Government shall serve a notice of revocation upon the licensee and shall fix a date on which the revocation shall take effect: and on and with effect from that date or on and with effect from the date if earlier on which the undertaking of the licensee is sold to a purchaser in pursuance of any of the succeeding clauses or is delivered to a designated purchaser in pursuance of subsec. (3) all the powers and liabilities of the licensee under this Act shall absolutely cease and determine; .. ... ... .. .. .. ... (2) Where an undertaking is sold under subsec. (1) the purchaser shall pay to the licensee the purchase price of the undertaking determined in accordance with the provisions of subsecs. (1) and (2) of sec 7A or as the Case may be subsec. (3) of that section. (3) Where the State Government issues any notice under subsec. (1) requiring the licensee to sell the undertaking it may by such notice require the licensee to deliver. and thereupon the licensee shall deliver on a date specified in the notice the undertaking to the designated purchase pending the determination and payment of the purchase price of the undertaking:

(3.) So far as the Electricity Supply Act is concerned only a few of its provisions are material. Sec. 57 provides: 57 The provisions of the Sixth Schedule and the Seventh Schedule shall be deemed to be incorporated in the licence of every licensee not being a local authority (a) in the case of a license granted Before the commencement of this Act from the date of the commencement of the licensees next succeeding year of account; an (b) in the case of a license granted after the commencement of this Act from the date of the commencement of supply and as from the said date. the licensee shall comply with the provisions of the said Schedules accordingly and any provisions of the Indian Electricity Act 1910 and the license granted to him thereunder and of any other law agreement or instrument applicable to the licensee shall in relation to the licensee be void and of no effect in so far as they are inconsistent with the provisions of sec. 57A and the said Schedules .