ANDHRA PRADESH STATE ELECTRICITY BOARD versus UNION OF INDIA & ANR.

Citation: [1988] 3 S.C.R. 216 · Decided: 11-03-1988 · Supreme Court of India · Bench: S. NATARAJAN · Disposal: Dismissed
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Judgment (excerpt)

A 
B 
ANDHRA PRADESH STATE ELECTRICITY BOARD 
v. 
UNION OF INDIA & ANR. 
MARCH 11, 1988 
rs. NATARAJAN AND M.N. VENKATACHALIAH, JJ.] 
Emergency Risks (Factories) Insurance Act, 1962/Emergency 
Risks (Factories) Insurance Scheme-Sections 2, 11 and 17/Clause 7 of 
Scheme-'Distribution and Transmission lines'-Whether constitute 
'insurable property'-'Property insurable under this Act'-lnterpreta-
C tion of-Grant of depreciation while ascertaining value of insurable 
property-Whether principles of Income Tax Act or Electricity 
(Supply) Act to apply. 
D 
General Clauses Act-Applicability to expired temporary-statu-
tes.,..-Effect of section 6 specifically invoked-Effect of. 
The Emergency Risks (Factories) Insurance Act, 1962 was enac-
ted to provide for expeditious rehabilitation of industrial undertakings 
in the event of damage in times of war. The Central Government 
accordingly undertook to insure the factories against war-risks. The 
Act envisaged the promulgation and effectuation of the Emergency 
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Risks (Factories) Insurance Scheme mandating a compulsory insurance 
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of factories against war-risks on payment of prescribed premia. 
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The Director of Emergency Risks Insurance Scheme, after giving 
an opportunity to the appellant to show cause, determined the sum of · 
Rs.47,59, 109.00 as balance of premia due from the appellant. 
The appellate authority-the Central Government-dismissed the 
appellant's appeal. The legality of the proceedings so culminating in the 
said appellate order was assailed by the appellant in the Writ Petition 
before the High Court of Andhra Pradesh, which was rejected. Hence 
this appeal by special leave. 
The contentions pressed by the appellant were (l) that "Distribu· 
tion and Transmission lines" did not constitute 'Factory' in the concept 
)._ 
of 'insurable property' under the 'Act'; (2) that in ascertaining the 
value of the insurable property, depreciation had had to be granted 
under the relevant provisions of the Income Tax, Act, 1922; (3) and that 
H the 'Act' was itself a piece of temporary legislation and the notice dated 
216 
_, 
A.P. STATE ELECT. BOARD v. U.0.1. 
217 
28. i l. 1968 issued after 10.1.1968 when the legislation had spent itself A 
out by effiux of time was without the authority oflaw. 
Dismissing the appeal, it was 
HELD: ( 1) The inhibitions of the limited import of the expression 
'factory' do not limit the identity of the 'insurable property' which will 
have to be ascertained and determined in accordance with the provisions 
of the 'scheme'. The Act enables the .Central Government to declare 
that provisions of the 'Act' and of the 'scheme'. shall apply to assets 
specified in section 17(l)(d), which include the whole or a specified part 
of the distribution and transmission system. The 'scheme' prepared and 
promulgated by notification S.O. 3974 which came into force with effect 
frolD 1. 1. 1963 provides, among other things, that the whole of the 
"Distribution and Transmission Systems" shall constitute 'insur-
able property' and that the 'Act' and the 'scheme' shall be applied to 
tbein. [220C-H] 
(2) The provisions as to depreciation in a taxing law like the 
Income Tax Act contain elements of incentives and ~re also informed by 
considerations of policy of the tax and do not reflect purely economic 
criteria relevant to the determination of the depreciation. In the instant 
case, the High Court found-that the Electricity (Supply) Act itself 
provided a formula for working out the allowance of depreciation and 
the appellant had been adopting that formula for valuation of its 
properties, assets, etc. There was, therefore, no error in principle in 
applying the standard of depreciation provided in Electricity (Supply) 
Act, 1948. [22IG; 2220] 
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D ' 
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(3) Whatever be the principles of construction of temporary-sta-
f 
totes and the effect of the rights and obligations under them after the 
expiry of the statute itself, the 'Act' in the instant case contains specific 
provisions preserving the rights and obligations. For that purpose the 
'Act' invokes the provisions of section 6 of the General Clauses Act. The 
principle behinds. 6 of the General Clauses Act is that all the provisions 
of Acts would continue in force for purposes of enforcing the liability 
G 
incurred when the Acts were in force and any investigation, legal pro-
ceedings, or remedy, may be instituted, continued or enforced as if the 
Acts had .not expired.
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