LexVELLORE ELECTRIC CORPORATION LTD. & ANR. versus STATE OF TAMIL NADU & ORS.
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VELLORE ELECI'RIC CORPORATION LTD. & ANR. v. STAIB OF TAMIL NADU & ORS. APRIL 13, 1989 [R.S. PATIIAK, CJ, SABYASACHI MUKHARJI, S .. NATARAJAN, M.N. VENKATACHALIAH, ANDS. RANGANATIIAN, JJ.] Constitution of India, 1950: Articles 14, 19, 31, 31-C, 39(b) and 39(c). -} 'Material Resources of the Community'-Whether include electri- cal energy generated and distributed by private undertakings. A B c Acquisition of undertakings-Compensation-Ju8ticiability of. Procedure under Indian Electricity Act, 1910-Alternative D COJICUrrent procedure envisaged under Tamil Nadu Private ElectriCity Supply Undertakings (Acquisition) Act, 1973-Whether discriminatory and unconstitutional. Tamil Nadu Private Electricity Supply Undertakings (Acquisi- E lion) Act, 1973: Sections: 2-6, JO(f) and 23. Constitutional validity of-Object of the Act-Whether has nexus to objects of Article 39(b) and (c) of the Constitution and therefore protection of Articje 31-C. Procedure for acquisition of undertakings initiated under Tamil Nadu Electricity Supply Undertakings (Acquisition) Act, 1954- Proceedings interrupted by Courts order-Fresh acquisition proceed- ings under subsequent Act of 1974-Whether acquisition of 'choses- in-action'. Provision relating to liability of licensee to account to Government in respect of possession of and any benefit derived from undertaking after date of vesting-Whether arbitrary or unconstitutional. F G 'Compensation Amount'-Provision for exclusion of works paid H 475 ,.! 476 SUPREME COURT REPORTS [1989] 2 S.C.R. A for by the consumers-Whether unconstitutional. B c Sums due to Government and Electricity Boa. ds from licensee-- Provision for deduction from compensation amount-Whether unconstitutional. Acquisition-Property belonging to undertaking-Non-delivery of-Loss sustained by Government-Computation of-Basis-Market value-Whether unconstitutional. Acquisition-"Accredited Representative"-Time granted to signify choice as to basis of determination of amount-Whether unreasonably short and arbitrary. The petitioner companies viz., Vellore Electric Corporation Ltd., Kumbakonam Electric Supply Corporation Ltd. and Nagapatam Electric Supply Corporation Ltd. were grantee of licences under the Indian Electricity Act, 1910 by the Government of the then Presidency D of Madras for supply of electrical-energy in their respective areas. In exercise of its power under Section 4( 1) of the Madras Electri- city Supply Undertakings (Acquisition) Act, 1954, the State Govern- ment issued orders dated 12.1.1968 taking over the undertakings of the Petitioner Companies viz., Kumbakonam Electricity Supply Company E and Nagapatam Electric Supply Company declaring that their under- takings shall vest in the Government with effect from the dates specified in their respective orders. These two petitioner companies filed writ petitions in the High t Court of Madras challenging the constitutional validity of the 1954 Act, 'i<-- F which were dismissed. The Writ Appeals filed by them were also dismissed by a Division - Bench of the High Court. Thereafter appeals were filed in this Court, c~ which were however, later withdrawn. G Though proceedings for the acquisition of the undertakings of these two companies had been initiated under the 1954 Act but full effectuation thereof had been interrupted by the interlocutory orders made by the courts staying delivery of possession of the undertaking. Subsequently the Tamil Nadu Private Electricity Supply Under- H takings (Acquisition) Act, 1973 came into force which, inter alia, nul- I ' VELLORE ELECIRIC CORPN. v. STATE 477 lilied the effect of the action taken under the 1954 Act. On 30.10.1973 A the _State Government issued fresh orders under Section 4(1) of 1973 Act declaring.that the undertakings of these two petitioner companies shall vest in Government with effect from 1.12.1973. . A similar order was passed by the State Government under Sec- tion 4(1) of 1973 Act in respect oithe third petitioner company viz. 1 Vellore Electric Corporation Ltd., declaring that the undertaking of •, this company shall vest in the Government with effect from 7.l.1974. By an order dated 2.2.1978 the State Government also rejected the application of the petitioner Vellore Electric Corporation seeking a change in the basis for determination of amount from basis A to basis B under the 1974 Act. B c t Writ Petitions were filed in this Court u
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