JUDGMENT

CHANDRACHUD, CJI. :— The appellant, the Mangalore Electric Supply Company Limited, was carrying on the business of distribution of electricity in Mangalore, South Kanara District, under a licence granted by the Government of Madras in favour of Messrs Octorious Steel & Company Limited. The licensee had assigned its rights to the appellant with the previous consent of the State Government. Under S. 4 of the Madras Electricity Supply Undertakings (Acquisition) Act, 1954, the State Government had the power to take over any electricity undertaking, declaring that it shall vest in the Government on the date specified therein. In exercise of that power, the Government of Madras passed an order declaring that the appellants undertaking would vest in the Government on Dec. 31, 1956. which date was later advanced to Oct. 15, 1956. The appellants undertaking was accordingly acquired by the Government and its properties were taken over on the date of vesting. Mangalore was then a part of the State of Madras.

2. Section 5 of the Acquisition Act, 1954, provided for payment of compensation to a licensee whose undertaking was taken over by the Government. Three modes of fixation of compen