Judgement

GAJENDRAGADKAR, J. : The Okara Electric Supply Co. Ltd., which is a Joint Stock Company and Shrimati V. V. Oberoi, one of the principal shareholders of the said company (hereinafter called petitioners 1 and 2 respectively) have filed the present petition against the State of Punjab and the Punjab State Electricity Board (hereinafter called respondents 1 and 2 respectively) in which they have claimed a writ, order or direction in respect of a notice issued by respondent 1 on January 3, 1958. The petition was presented on January 3, 1959, and it claimed an order or writ restraining the respondents from giving effect to the said notice. It appears that on January 4, 1959, in pursuance of the said impugned notice the respondents took possession of the petitioners property in question, and so, by an order passed by the learned Chamber Judge the petitioners were allowed to make an additional claim for a writ or order or direction in the nature of mandamus directing the respondents to hand over to the petitioners the said property in question. This petition is made on the ground that the impugned notice and action taken by the respondents in pursuance of it are illegal and unauthorised and they affect the petitioners fundamental rights under Arts. 19 and 31 of the Constitution.

2. The first petitioner was granted sanction under S. 28 of the Indian Electricity Act 9 of 1910 (hereinafter called the Act) authorising it to engage in the business of supplying energy at Muktsar by Government Notification No. 1766-I & C-48/28784 published on May 26, 1948. By virtue of the said sanction the first petitioner has ever since been engaged in the business of supplying electric energy at the said place and for the purpose of its business it has set up an electricity undertaking at considerable cost. On January 3, 1958, the Secretary to respondent 1, P. W. D. Irrigation and Electricity Branches, Chandigarh, issued notice against the first petitioner purporting to exercise the option given to respondent 1 by cl. 11 of the said notification. By this notice the first petitioner was told that respondent 1 had exercised its option under the said clause, and that on the expiry of the period of one year after the receipt of the notice by the first petitioner its undertaking shall vest in and become the absolute property of respondent 1.

3. The first petitioner has been having bulk supply from P. W. D. Electricity Branch of respondent 1, and, according to the petition, respondent 1 could not and will not take over the plant and yet has ordered the first petitioner that it cannot sell the plant without permission of respondent 1. The imposition of this condition is wholly illegal and it amounts to an unreasonable restriction on the petitioners right to carry on business and to hold and dispose of its property.

4. The petition alleges that cl. 11 of the notification on which the impugned notice is founded is ultra vires S. 28 of the Act; and that alternatively, if the inclusion of the said clause in the notification is justified by S. 28 of the Act. S. 28 itself is ultra vires since it offends against Arts. 19 and 31 of the Constitution. It is on these allegations that originally the petition claimed an order against the enforcement of the notice and subsequently added the prayer for a writ or mandamus directing respondent 1 to restore to the petitioners possession of the property which has been taken over by respondent 1 after the filing of the present petition.

5. The claim thus made is denied by both the respondents. It is urged that the petitioners cannot challenge the validity of Cl. 11 which was accepted by them before the Constitution came into force. It is further urged that the said clause is justified by the provisions of S. 28 of the Act and that both the said clause and S. 28 are intra vires and valid. The respondents further alleged that after possession was taken of the property of the first petitioner in exercise of the option under cl