GUNTUR TOBACCOS LTD. versus THE TRANSMISSION COPRN. OF A.P. & ANR.

Citation: [2008] 6 S.C.R. 401 · Decided: 11-04-2008 · Supreme Court of India · Bench: A.K. MATHUR · Disposal: Dismissed

Judgment (excerpt)

. -t 
[2008] 6 S.C.R. 401 
GUNTUR TOBACCOS LTD. 
V. 
THE TRANSMISSION COPRN. OF A.P. & ANR. 
(Civil Appeal No. 312 of 2002) 
APRIL 11, 2008 
(A.K. MATHUR AND ALTAMAS KABIR, JJ.) 
Andhra Pradesh Electricity Supply Undertaking 
Acquisition Act, 1954/lndian Electricity Act, 191 O; Section 9(2) 
A 
B 
& (3): 
c 
Lease deed - State Government granting a licence in 
favour of a company for running an Electrical Undertaking to 
generate and supply electricity, and in connection thereof 
transferred certain land/property to it -
The company 
transferring the land in question in favour of appellant-company D 
- State Government acquiring the Electrical Undertaking from 
the company in terms of provisions under 1954 Act - State 
Government transferring the land in question to State 
Transmission Corporation/Electricity Board - Issuance of 
notice to lessee to vacate the land - Eviction suit-Allowed by E 
trial Court - Appeal filed against, dismissed by Single Judge 
of the High Court - Letters Patent Appeal dismissed by 
Division Bench of the High Court - Correctness of - Held: 
Correct - In view of Ss.4 & 6 of the 1954 Act rlw relevant 
provisions u/1910 Act, the properties transferred to the 
company for which licence was granted for generation of F 
electricity remained a part of the company unless licence 
modified - Licence not modified -
Thus, the properties 
remained vested with the company - In terms of order of the 
State Government passed under the provisions of 1954 Act, 
the said properties transferred to State Electricity Transmission G 
Corporation/Board, therefore, came to be vested with them -
Since lease came to an end, the State Government was no 
longer under the obligation to act in accordance with the terms 
of the lease agreement, whereby option was given to the lessee 
401 
H 
402 
SUPREME COURT REPORTS 
[2008] 6 S.C.R. 
A to purchase the property - Hence, the appeal fails on merit -
Transfer of Property Act - S. 54 - Benefits under, entitlement 
to. 
State Government of Andhra Pradesh had granted a 
licence to a company, namely, Guntur Power and Light 
8 Limited (GPL) for the purpose of supplying electricity to 
certain area of the State, and in connection thereof 
acquired certain land and transferred the same to the 
company. Later, in the year 1938, the company ceased to 
generate electricity and confined itself only to distribution 
C of power. From 1939 onwards, GPL did not use the 
properties meant for running the Electrical Undertaking 
or for ancillary purpose. In the year 1945, GPL granted a 
lease in favour of its sister- company, namely, Guntur 
Tobacco Company (GTC), the appellant in respect of 
D certain land with right to construct buildings thereon and 
with an option to purchase the demised land in terms of 
relevant clauses of the sale deed. Subsequently, further 
land was transferred by the company in favour of appellant 
by executing sale deeds and the period of the lease also 
E extended till the end of the year 1971. In the year 1956, the 
State Government allegedly acquired the Electrical 
Undertaking from GPL, whereupon the Undertaking of 
GPL vested in the State Government and the property in 
question was transferred by the State Government to the 
F State Electricity Board. However, GTC continued to 
remain in possession of the properties in question 
purportedly on the strength of the lease deed executed 
by GPL in its favour. The Transmission Corporation of 
Andhra Pradesh issued a notice to the appellant calling 
G upon to vacate the demised premises. Since the appellant 
failed to respond to the notice to vacate the premises, the 
Corporation filed an eviction suit on the ground that the 
lease in question executed and registered in favour of GTC 
were not valid; and that GTC was liable to be evicted. Trial 
Court decreed the suit in favour of respondent No.1. 
H 
• 
GUNTUR TOBACCOS LTD. v. THE TRANSMISSION 
403 
COPRN. OF A.P. & ANR. 
Appeal filed thereagainst by the appellant was dismissed A 
by the Single Judge of the High Court. Aggrieved, the 
appellant filed a Letters Patent Appeal, which was 
dismissed by the High Court holding that although the 
agreement dated 18.3.1954 was not hit by s.9 of the Indian 
Electricity Act, 1910 but the second part of the agreement B 
which gives an option to the licensee of purchasing the 
property cannot be enforced because of the statutory 
obligation of A.P. Electricity Supply Undertakings 
(Acquisition) Act, 1954. Hence, the prese

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