GODHRA ELECTRICITY CO. LTD. & ANR. versus THE STATE OF GUJARAT AND ANOTHER

Citation: [1975] 2 S.C.R. 42 · Decided: 12-09-1974 · Supreme Court of India · Bench: A.N. RAY · Disposal: Appeal(s) allowed

Cited by 6 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

42 
GODHRA ELECTRICITY CO. LTD. & ANR. 
v. 
THE STATE OF GUJARAT AND ANOTHER 
September 12, 1974 
[A. N. RAY. C.J., AND K. K. MATHEW, JJ.J 
l11dia1•1 Electricily Act, 1960, ss. 6.· 7 and 7A-'Date of comme11ceme111 of 
licence,' .what is-Taki1111 imdertnki11g and postpo11i11g payment of purchase price 
withom interest u11der s. 6(6). Ti affects fundamental right under Art. 19(1) (/) 
and (11)--Whether sharelwld,e1· can challenge validity of scct/011. lnterpretatio11 
of. Deed;~Notificatio11-Subse1111e111 co11duct if relevalll. 
Section 6(1) of the Indin Electricity Act, 1910 as amended by the Amendment 
Act of 1959, provided that where a licence had be1:n granted to any person, 
the State Electricity Board shall, in the case of a licence granted before the 
commencement of the Amendinent Act, on the expiration of such period as is 
specified in the licence, have the option of purchasing the undertaking and such 
option shall be exercised by the: State Electricity Board serving upon the licensee 
a notice in writing of not less than one year, requiring the licensee to sell the 
undertaking to it at the expiry of the period. 
Section 6(6) provided that where 
a notice exercising the option of purchasing the undertaking has been served 
upon the Hceiisee the licew,ee shall deliver the undertalting to the Stale Electricity 
Board on the' expiry of the relevant period referred to in sub-sectioa ( 1) 
pe11di1111 the determi'.'ati<m and paymelll of the purchase price. 
By a notification dated November 16, 1922, a licence was ·granted to the 
predecessor of the first appellant company, under s. 3 of the Act The licence 
was signed on 17th November and the notification granting it was published in 
the offi:ial Gazette dated 23rd November. The licence was for a period of 
50 years from its commem:ement. The second respondent exercised the option 
to purchase the undertaking by a notice under s. 6( 1) by calling upon. the 
appellants to sell the undertaking to it on the midniglit intervening between !Sth 
and 16th Nov~mber. 1972. Thereafter, the first respondent took over manage· 
ment of the undertaking and then handed it over to the second respondent. 
The appellants filed a writ petition challenging the validity of the notice 
issued by the second respondent and the vires of ss. 6, 7 and 7 A of the Act. 
The High Court dismissed the petition. 
Jn appeal to this Cou1t it was contended that-( I) the date of the commence-
ment of the licence was the date on which the notifi,cation granting the licence 
was published in the official gazette, namely, November 23, 1922 .and not the 
date of the notification granting the licence, that is November 16: 1922, and. 
therefore. the 50 years period did not ,expire on the midnight intervening between 
15th and 16th November, 1972, and $0, the notice given by the second respon-
dent was bad: and ( 2) that the provisions of s. 6( 6) of the Act were invalid 
as they abridged the righli gmiranteed under Art, 19(1 )(f) and (g) of the 
Constitution. 
Allowing the appeal on the second ground, 
HELD : There was no valid purchase of the undertaking and the taking 
delivery of the undertakin1i by the second respondent was unlawful and the 
second respondent must re .. deliver the undertaking to the lkensee. 
[56BJ 
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:a 
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D 
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F. 
G 
(l)(a) Rule 17 of the Indi~n Electricity Rules, 1922 provides for the publica· 
tion of the licence in the official .gazette to notify that it has been granted. 
H 
Rule 18 states that the date of notification under r. 17 shall be deemed to be 
the date of the commencem~nt of the licence. Clause 2(e) of the licence 
provid1is that the date of the notification in the gai:ette that the licence has 
been granted >s the date of tho: commencement of the Hcence. 
The words "the 
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G 
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GODHRA ELECT. CO. V. GUJARAT 
43. 
licence has been granted" do not postulate that the licence has already been. 
~igned 
and 
granted 
because, 
there 
is 
· noihing 
strange 
. m making the date of the notification in the gazette that the licen:e has beelll 
granted, though anterior in point of time to the date of signing the licence, as. 
the date of the commencement of the qicence. Clause 2(e) of the licence will 
have to be read in harmony with rule 18 and if so read it will be found that 
the date of the notification is only deemed to be the date of the commencement 
of the licence, that is, the date of the notification. granting the li:ence and the 
date of commence

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