Full Judgment Text
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PETITIONER:
COCHIN STATE POWER AND LIGHT CORPORATION LTD.
Vs.
RESPONDENT:
STATE OF KERALA
DATE OF JUDGMENT:
25/02/1965
BENCH:
BACHAWAT, R.S.
BENCH:
BACHAWAT, R.S.
SUBBARAO, K.
SHAH, J.C.
CITATION:
1965 AIR 1688 1965 SCR (3) 187
ACT:
India Electricity Act, 1910, s. 6(1)(2) and (4)--Scope of.
HEADNOTE:
The appellant held a licence for the supply of electrical
energy in Kerala which was granted for a period of 25 years,
and was subject to continuation for ten-year terms in the
absence of a notice by the local authority or State
Government of an election to purchase the undertaking. The
first 25-year term of the licence expired on December 2,
1960, and prior to that, on October 24 and again on October
29, 1959, the State Electricity Board gave notice to the
appellant under s.6(1) of the Indian Electricity Act. 1910,
to purchase the under taking on the expiry of the licence.
On November 20, 1959,the State Government also served notice
on the appellant of its election to purchase the
undertaking on December 2, 1960.
In November 1960, the appellant filed a writ petition in
the High Court seeking orders restraining the State
Electricity Board and the respondent State Government from
taking any action pursuant to the notices given by them. In
the course of the hearing the petition the State
Electricity Board waived and abandoned all its rights of
purchase of the Undertaking. The writ petition thereafter
dismissed and it was held that the State Government was
entitled to take further steps under its notice dated
November 20, 1959. An appeal against this decision to a
Division Bench of the High Court was dismissed.
In the appeal to the Supreme Court, the appellant
contended,inter alia, that the State Electricity Board
having duly elected under 6(1) to purchase the undertaking
on the expiry. of the licence, the State Government acquired
no option of purchase under s. 6(2) the 1910 Act.
HELD: Any option of purchasing the undertaking on the expiry
of the period of 25 years specified in the licence under s.
6(1) vested in the State Electricity Board, and as the Board
duly elected to purchase the undertaking by the notice
served on the appellants, the State Government acquired no
right or option of purchasing the undertaking under s. 6.
[193 G-H]
As s. 6 came into force less than eighteen months before
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December 2, 1960, it was impossible for the Board to have
given notice to the State Government as required by s. 6(4)
of its intention to exercise the option. On the principle of
lex non cogit ad impossibil must therefore’ be construed as
not being applicable in the
that the Board could not be deemed circumstances of the
case, so elected not to purchase the undertaking under
s. 6(4).[193 E-F]
JUDGMENT:
CIVIL, APPELLATE JURISDICTION: Civil Appeal No. 897 of
1963.
Appeal from the judgment and order dated October 4, 1962 of
the Kerala High Court, Ernakulam, in Writ Appeal No. 17 of
1962.
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A.V. Viswanatha Sastri, Arun B. Saharaya and Sardar
Bahadur, for the appellant.
V.P. Gopalan Nambiar, Advocate-General for the State
Kerala and V.A. Seyid Muhammad, for the respondent.
The Judgment of the Court was delivered by
Bachswat, J. The short question in this appeal is
whether the proposed acquisition of the electrical
supply undertaking of the appellant by the State of Kerala
in pursuance of the notice Ex. G, dated November 20, 1959 is
authorised by s. 6 of the Indian Electricity Act, 1910.
The appellant is the holder of a license for the supply
of electrical energy in Ernakulam and other places in
Cochin. The license was originally granted to the managing
agents of the appellant under the Cochin Electricity
Regulation III of 1902 then in force in Cochin and
subsequently assigned to the appellant with the permission
of the Cochin Government. On the merger of Travancore-Cochin
with the Union of India, the Indian Electricity Act, 1910
was made applicable by the Part-B States Laws Act, 1951
(Act III of 1951) to the Travancore-Cochin area, and the
Cochin Electricity Regulation stood repealed. The
Electricity (Supply) Act, 1948 (Act 54 of 1948) was also
made applicable to the Travancore-Cochin area by the Part-B
States Laws Act, 1951. On March 31, 1957 the Kerala
Electricity Board was constituted, and by s.71 of Act 54 of
1948, any right and option to purchase the undertaking of
the licensee under the Indian Electricity Act, 1910 was
transferred to and vested in the Board. Now, the right or
option to purchase the undertaking of a licensee under
s.7(1) of the Indian Electricity Act, 1910 then in force was
exercisable "on the expiration of such period, not exceeding
fifty years, and of every such subsequent period, not
exceeding twenty years as shall be specified in this behalf
in the license." Sub-section (4) of s.7 provided:
"Not less than two years’ notice in
writing of any election to purchase under this
section shall be served upon the licensee by
the local authority or the State Government,
as the case may be."
Clause 15(a) of the license held by the
appellant provides:
"The option of purchase given by Section
7, sub-section (i) of the Regulation shall
first be exercisable on the expiration of 25
years from the commencement of this license
and on the expiration of every subsequent
period of ten years during the continuance of
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this license."
Section 7(1) of the Indian Electricity Act, 1910
corresponds to s. 7(i) of the Regulation, that is to say, of
the Cochin Electricity. Regulation. The date of the
commencement of the license is December 3, 1935. The period
of 25 years mentioned in el. 15(a) of the license expired on
December 2, 1930. The last date for
giving the two years notice of the election to purchase on,
the try of’ December 2, 1960 required under s. 7(4) of the
Indian e electricity Act, 1910 expired on December 2. 1958.
On February 11, 1959, the State Electricity Board served on
the appellant a notice, Ex. B, of its election to purchase
the undertaking of, the appellant on the expiry of December
2, 1960, but this notice was not being in accordance with
s. 7,(4) was of no legal effect.
By the Indian Electricity (Amendment) Act, 1959 (Act 32
1959), s.6 now in force was substituted for the old s.7 of
the Indian Electricity Act, 1910, with effect from September
5, 1959. Section 6 of the Indian Electricity Act; 1910 now
in force reads:
"6. (1) Where a license has been granted to any person not
being a local authority, the State Electricity Board
shall,--
(a) in ’the case of a license granted’ before the
commencement of the Indian Electricity (Amendment) Act,
1959, on the expiration of each such period as is specified
in the license; and
(b) in the case of a. license granted on or after the
commencement of the said Act, on the expiration of such
period not exceeding twenty years and of every such
subsequent period, not exceeding ten years, as shall be
specified in this behalf in the license;
have the option of purchasing the undertaking and such
opt:on shall be exercised by the State Electricity Board
serving upon the license a notice in writing of not less
than one year requiring the licensee to sell the undertaking
to it at the expiry of the relevant period referred to in
this sub-section.
(2) Where a State Electricity Board has not been
constituted, or if constituted, does not elect to purchase
the undertaking, the State Government shall have the like
option to be exercised in the like manner of purchasing the
undertaking.
(3)Where neither the State Electricity Board nor the
Government elects to purchase the undertaking, any authority
constituted for an area within which the area of supply is
included shall have the like option to be exercised in the
like manner of purchasing the undertaking.
(4) If the State Electricity Board intends to exercise the
option of purchasing the undertaking under this it shall
send an intimation in writing of such intention to the State
Government at least eighteen months before the expiry of the
relevant period referred to in subsection (1) and if no such
intimation as aforesaid is receiv
190
ed by the State Government the State Electricity Board shall
be deemed to have. elected not to purchase the undertaking.
(5) If the State GoVernment intends to exercise the option
of purchasing the undertaking under this section. shall send
an intimation in writing of such intention to the local
authority, if any, referred to in sub-section (3) at least
fifteen months before the expiry of the relevant period
referred to in sub-section (1) and if no such intimation as
aforesaid is received by the local authority. the State
Government shall be deemed to have elected not to purchase
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the undertaking.
(6) Where a notice exercising the option of purchasing
the undertaking has been served upon the licensee under this
sect:on, the licensee shall deliver the undertaking to the
State Electricity Board, the State Government or the local
authority, as the case may be, on the expiration of the
relevant period referred to in sub-section (1) pending the
determination and payment of the purchase price.
(7) Where an undertaking is purchased under this
section, the purchaser shall pay to the licensee the
purchase price determined in accordance with the provisions
of sub-section (4) of section 7A."
On October 24, 1959, the State Electricity Board served
upon the appellant a notice Ex. D, of its election to
purchase the undertaking on the expiry of December 2, 1960.
On October 29, 1959, the State Electricity Board served
upon the appellant another notice, Ex. E, of its election.
On November 20, 1959, the State Government served upon the
appellant a notice, Ex. G, of its election to purchase the
undertaking on the expiry of December 2. 1960. On November
14, 1960, the appellant filed a writ petition in the High
Court of Kerala impleading the State of Kerala and the
Kerala State Electricity Board and asking for the issue of
appropriate writs and orders restraining them from taking
any action pursuant to the notices. Exs. B,D,E and G. On
December 20. 1961, a learned single Judge of the High Court
passed the following order :
"In view of the representation made
before me by both the learned Advocate-General
appearing for the State, the I st respondent,
and Mr. Krishnaswami lIyengar, learned counsel
appearing for the Kerala State Electricity
Board. the second respondent. that for the
purpose of this writ petition. the notices
issued by the Kerala State Electricity Board,
Exs. B. D and E can be ignored, it follows
that neither the 1st respondent nor the 2nd
respondent has any jurisdiction or power to
take any action on the basis Exs. B. D or E.
In view of the fact that I am uphold-
191
ing the action of the State Government, who
had issued the notice Ex. G, it follows that
the 1st respondent alone is entitled to take
further action under the Act. in pursuance of
the notice, Ex. G, issued and sent along with
the covering letter, Ex. F on 20-1 1-1959. It
follows, subject to what is stated about Exs.
B, D and E, that the writ petition has to be
dismissed. There will be no order as to
costs."
The effect of this order was that the State Electricity
Board waived and abandoned all its rights of purchase of the
undertaking under the notices, Exs. B, D and E, and neither
the Kerala State Electricity Board nor the State of Kerala
had any jurisdiction or power to take any action on the
basis of those notices, and save as aforesaid, the writ
petition was dismissed, and it was held that State
Government was entitled to take further action under its
notice, Ex. G. Aggrieved by this order, the appellant filed
an peal in the Kerala High Court impleading the State
Government only as the party respondent. The State
Electricity Board did not file any appeal from the order of
the learned single Judge. By its judgment dated October 4,
1962, a Division Bench of the High Court dismissed the
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appeal. In paragraph 15 of its judgment, Bench observed:
"In its petition the appellant asked for
reliefs both against the State Government
and the State Electricity Board. However,
in the course of the hearing of the petition,
the Board gave up its claims under Exts. B. D
and E, and only the claim of the State
Government under Ext. G was canvassed. The
petition was, in effect, allowed: against
the Board. The Baord has not appealed and is
not a party to the present appeal; and its
notices may therefore be ignored except to
the extent that they may affect the rights
of the State Government."
The appellant now appeals to this Court under a
certificate granted by the High Court under Arts. 133(1)(a)
and 133(1)(c) of the Constitution.
On half of the appellant, Mr. Vishwanath Sastry contended
that (1) as the two years’ notice in writing of. the
election to purchase the undertaking on the expiry of
December, 2, 1960 was not served on the appellant as
required by the old s. 7(4) of the Indian Electricity Act.
1910. the appellant acquired a vested right to hold the
license until the expiry of a further period of ten
years.that is to say, until December, 2, 1970. and this
vested right was not taken away either expressly or by
necessary implication by the new s.6 of the Indian
Electricity Act, 1910 introduced by the amending Act 32 of
1958; (2) the expression "on the expiration of each such
period as is specified in the license" in the new s.6(1)(a)
means a period which has not expired and on the expiry of
which the option may be legally exercised. and since in
the absence of the two years’ notice required under the
old s.7(4), the option of purchase on the expiry of December
2, 1960 could not be legally
192
exercised, the new s.6(1) did not confer any option of
purchase on the expiry of December 2, 1960 and the first
option exercisable under the new s.6(1) would be on the
expiry of December 2, 1970; (3) sub-sections (4) and (5) of
the new s.6 show that the period on the expiry of which the
option under sub-s(1)of s.6 is exercisable, is a period
which would expire at least 18 months after the coming into
force of the new s.6, that is to say, after September 5,
1959, and since the period expiring on December 2, 1960 is
not such a period, the new s.6(1) did not confer any option
of purchase on the expiry of December 2, 1960; and (4) in
any event, the State Electricity Board having duly elected
to purchase the undertaking on the expiry of December 2,
1960, the State Government acquired no option of purchase
under sub-s(2) of s.7 of the Indian Electricity Act, 1910.
On behalf of the respondent. Mr. V.P. Gopalan Nambiar,
the Advocate-General of Kerala, contended (1) that the
absence of two years’ notice under the old s.7(4) of the
Indian Electricity Act, 1910 did not confer upon the
appellant a vested right to hold the license until the
expiry of December 2, 1970, and the immunity from compulsory
purchase under the old s.7 arising from the non-service of
the requisite two years’ notice could be, and, in fact, was
taken away by the new s.6, which required only one year’s
notice of intention to purchase the undertaking; (2)
assuming that the appellant acquired under the old s.7 a
vested right to hold .the license until December 2, 1970,
such vested right was taken away by the new s.6, which
expressly applies to licenses granted before its
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commencement, and the period of 25 years is a period
specified in as the license on the expiry of which the
option of purchase was legally exercisable; (3) sub-sections
(4) and (5) of the new s.6 did not cut down the plain
meaning of sub-s(1) of the section and the option on the
expiry of the period of 25 years was vested’under sub-s(1)
of s.6, though this period did not expire 18 months after
September 5. 1959; and (4) as the State Electricity Board
did not send to the State Government any intimation in
’writing ’of’ its intention to exercise the option on the
expiry of December 2, 1960 as required by sub-s(4) of s.6,
the Board must be deemed to have elected not to exercise
this option, and consequently by sub-S(2) of s.6. the State
Government is vested with the option
We think that the fourth contention of Mr. Viswanatha
Sastry is sound, and should be accepted. Assuming,
without deciding, that the option of purchasing the
undertaking on the expiry of the period of 25 years
specified in the license was available under sub-s(1) of
s.6, such option vested in the State Electricity Board, and
as the Board duly elected to purchase the undertaking, the
State Government acquired no right or option of purchasing
the undertaking under s.6. On this ground alone, the appeal
should be allowed, and in this view of the matter, we do not
think it necessary to express any opinion on the other
contentions urged
193
before us. As far as the State Electricity Board is
concerned,. it has abandoned and waived its option of
purchase on the expiry of 25 years.
Sub-section (1) of s.6 expressly vests in the State
Electricity Board the option of purchase on the expiry of
the relevant period specified in the license. But the State
Government claims that under sub-s(2) of s.6 it is now
vested with the option. Now, under sub-s(2) of s.6, the
State Government would be vested with the option only "where
a State Electricity Board has not been constituted, or if
constituted, does not elect to purchase the undertaking." It
is common case that the State Electricity Board was duly
constituted. But the State Government claims that the State
Electricity Board did not elect to purchase the undertaking.
For this purpose, the State Government relies upon the
deeming provisions of sub-s(4) of s.6, and contends that as
the Board did not send to the State Government any
intimation in writing of its intention to exercise the
option as required by the sub-section, the Board must be
deemed to have elected not to purchase the undertaking. Now,
the effect of sub-s(4) read with sub-s(2) of s.6 is that
on failure of the Board to give the notice prescribed by
sub-s(4), the option vested in the Board under sub-s(1) of
s.6 was liable to be divested. Sub-section (4) of s.6
imposed upon the Board the duty of giving after the coming
into force of s.6 a notice in writing of its intention to
exercise the option at least 18 months before the expiry of
the relevant period. Section 6 came into force on September
5, 1959, and the relevant period expired on December 3.
1960. In the circumstances, the giving of the requisite
notice of 18 months in respect of the option of purchase on
the expiry of December 2, 1960, was impossible from the very
commencement of s.6. The performance of this impossible duty
must be excused in accordance with the maxim, lex non
cogitate ad impossible (the law does not compel the doing
of impossibilities), and sub-s(4) of s.6 must be construed
as not being applicable to a case where compliance with it
is impossible. We must therefore, hold that the State
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Electricity Board was not required to give the notice under
sub-s(4) of s.6 in respect of its option of purchase on the
expiry of 25 years. It must follow that the Board cannot be
deemed to have elected not to purchase the undertaking under
sub-s(4) of s.6. By the notice served upon the appellant,
the Board duly elected to purchase the undertaking on the
expiry of 25 years. Consequently, the State Government never
became vested with the option of purchasing the undertaking
under sub-s(2) of s.6. The State Government must, therefore,
be restrained from taking further action under its notice,
Ex. G, dated November 20, 1959.
In the result, the appeal is allowed, and the
respondent State of Kerala is restrained from taking any
action under the notice, Ex. G, dated November 20, 1959. The
respondent shall pay to the appellant the costs in this
Court. We direct the parties to pay and bear their own costs
in the Courts below. Appeal allowed.
194