LexBIHAR STATE ELECTRICITY BOARD versus PATNA ELECTRIC SUPPLY CO. LTD. AND ORS.
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BIHAR STATE ELECTRICITY BOARD v. PATNA ELECTRIC SUPPLY CO. LTD. AND ORS. MAY 12, 2000 [S. SAGHIRAHMAD, Y.K. SABHARWAL AND S.N. VARIAVA, JJ.] Indian Electricity Act, 1910: Sections 6 and 7-A (as amended by Act 15 of 1975). A B Electric company-Purchase/takeover of-After issue of Ordinance- C Challenge of-On grounds of violation of Arts. 19(1)(/) and 31(2)-Held: Amending Act/Ordinance not violative of Arts. 19(1)(/) and 31(2)-Hence valid-Indian Electricity (Bihar Amendment) Act, 1974-Constitution of India, 1950, Arts. 19(1)(/) and 31(2). Electric Company-Purchase/takeover of-Market value or Book D value-Payability of-Notice of takeover given on 5-1-1973 and undertaking taken over on 6-2-1974 after promulgation of amending Ordinance-Held: On the day of taking over unamended S. 6 no longer stood on the Statute book-Notice of one year is a notice of not less than 6 months-ft is unnecessary to give fresh notice-Therefore, the takeover is under the E amended Sections-Hence, book value is payable, not market value. Respondent No. I was granted a licence for supply of electric energy. One of the terms of the licence was that at the end of the licence period the Government had a right to purchase the undertaking. The licence was for a period of 50 years. On the expiry or the licence period the appellant served a F notice dated 5-1-1973 on respondent No.I under Section 6(1) of the Indian Electricity Act, 1910. By this notice the appellant called upon respondent No.I to sell its undertaking. The undertaking was accordingly taken over on 6-2- 1974. Subsequently, Sections 6 and 7-A of the Act were amended by the Indian G Electricity (Bihar Amendment) Act, 1974, which came into force on 2-2-1974. The Amending Act provided a notice period of not less than 6 months instead of one year. The purchase price was the book value of the undertaking instead of the market value. The first respondent's undertaking was taken over after the amending Ordinance. H 379 380 SUPREME COURT REPORTS [2000] SUPP. I S.C.R. A The first respondent challenged the validity of the Ordinance and the B Amending Act before the High Court on the ground ofviolation of its rights under Articles 19(1)(f) and 31(2) of the Constitution. The High Court upheld the cballt:nge. Hence this appeal Allomng the cppenl, this Court HELD: 1. The undertaking was taken over on 6-2-1974. On tbct day the unamended Section 6 of the Indian Elt:ctricity Act, 1910 no longer stood on the Statute book. It bas been replcced by a new Section 6, which was incorporated by the Indian Ekctricity (Bibar Amendment) Act, 1974 (Act No. 15of1975). Undoubtedly the Amending Act provides for a notice of not less C than 6 months. It was not necessary to give a fresh notice. The fll'St respondent bad been given a notice of not less than 6 months. Therefore, the takeover was under the amended Sections. On the date of takeover what was payable was book value and not market value. (387-D-EJ D Tinsulchia Electric Supply Co. Ltd v. State of Assam, (1989) 3 SCC 709, followed. Maharashtra State Electricity Board v. Th<fne Electric Supply Co. (1989) 3 SCC 615 and Ve/lore Electric Corporation Ltd v. State of Tamil Nadu, (1989) 4 SCC 138, relied on. E Patna Electric Supply Co. Ltd v. Bihar State ElectriciJy Board, AIR (1982) Cal 74, reversed. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2630 of 1982. F From the Judgment and Order dated 22.7.81 of the Calcutta High Court in Appeal from Appellate Order No. 16 of 1980. V.R. Reddy, Dr. A.M. Singhvi, Ms. Pareena Swarup, Sunil Morarka, Praveen Swarup, Pramod Swarup, Bharatiji Jaiswal, Pradeep Agrawal, A. Mishra, A.P. Dhamija, Sushil Kr. Jain, Ms. Meera Mathur and V. Shekhar for the G appearing parties. The Judgment of the Court was delivered by S.N. V ARIA VA, J. I. This Civil Appeal is against the Judgment dated 22nd July, 1981, delivered by a Division Bench of the Calcutta High Court H (since reported in AIR (1982) Calcutta p. 74). By this Judgment the Division BIHARSTATEELECTRICITYBOARD v. PATNAELECTRICSUPPLY[S.N. VARIAVA,J.] 381 Bench dismissed the Appeal filed by the Appellant against a Judgment of a A learned single Judge of the Calcutta High Court which upheld the challenge of the 1st Respondent to Ordinances and Amendment Act set out hereinafter. 2. Briefly stated the facts are as follows: On 6th February, 1924 the Government ofBihar Pradesh granted to one B Mis Octavices Steel &
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