Back
1948 Supreme(SC) 85
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD UTHWATT, LORD MORTON OF HENRYTON, LORD REID, SIR MADHAVAN NAIR AND SIR JOHN BEAUMONT.
HUBLI ELECTRICITY COMPANY, LIMITED - Appellant
Versus
PROVINCE OF BOMBAY - Respondents
On Appeal from the High Court at Bombay.
Decided On : December 20, 1948.
Solicitors for appellants: T. L. Wilson & Co.
Solicitor for respondent: Solicitor, High Commissioner for India.
The government's opinion on a licensee's default under the Indian Electricity Act is conclusive and not subject to objective tests, provided the obligation breached is legally required "by or under" the Act, which includes conditions incorporated via the statutory Schedule.
Headnote:(A) Indian Electricity Act, 1910 - Sections 3(2)(f), 4(1)(a), and 4(2) - Revocation of licence - Power to impose new conditions - The opinion of the government regarding whether a licensee has made a wilful and unreasonably prolonged default in doing anything required by or under the Act is the determining matter and is conclusive; it is not subject to objective tests as to the sufficiency of the grounds on which the opinion is based.
(B) Construction of "required by or under the Act" - The question of what obligations are imposed on licensees by or under the Act is a question of law, and the government is not the arbiter of the construction of the Act. However, conditions contained in the Schedule to the Act, which are incorporated into the licence by section 3(2)(f), are requirements "under" the Act. Consequently, a breach of such scheduled conditions can form the basis of the government's opinion for the purpose of revoking a licence or imposing further conditions under section 4(2).
Facts of the case:
A licensee of an electricity supply licence failed to maintain the plant in proper working order, resulting in an inability to meet the average peak load of consumers. Following an inspection, the government informed the licensee that it was satisfied there were sufficient grounds for revoking the licence due to default. Instead of immediate revocation, the government permitted the licence to remain in force subject to new conditions requiring the reconditioning of the plant and proper maintenance arrangements. The licensee failed to comply with these new conditions, leading to the eventual revocation of the licence. The licensee challenged the validity of the revocation, contending that the government's opinion was subject to objective tests and that the government failed to act judicially.
Findings of Court:
The court found that the government had entertained the relevant opinion required under section 4(1)(a) of the Act. It was further determined that the performance of the conditions in the Schedule to the Act is required "under" the Act, thereby validating the government's authority to impose new conditions under section 4(2) and subsequently revoke the licence for non-compliance.
Issues: Whether the government's opinion under section 4(1)(a) is subject to objective tests of sufficiency and whether the performance of conditions in the Schedule to the Act is required "by or under" the Act.
Ratio Decidendi: The statutory language "in its opinion" indicates that the government's view on the existence of a default is conclusive and not subject to judicial examination regarding the sufficiency of the grounds. While the government cannot decide the law, the court held that since the Schedule is incorporated into the licence by statute, any obligation therein is a requirement "under" the Act. Thus, the government was entitled to impose new conditions based on the licensee's failure to meet those statutory obligations.
Result: Appeal dismissed.
Act Referred
Legal Category Hierarchy
-
administrative law
-
licensing
- revocation of license
-
licensing
-
statutory interpretation
- indian electricity act 1910
Judgement
Appeal (No.100 of 1947) from a judgment and decree of the High Court in its appellate jurisdiction (October 1, 1946) affirming a judgment of the High Court in its original civil jurisdiction (April 5, 1945).
The following facts and statutory provisions are taken from the judgment of the Judicial Committee. On June 26, 1924, the government granted a licence—The Hubli Electric Licence, 1924—to Amte and Co., Hubli, and that licence was on January 28, 1925, duly transferred to the appellants with the consent of the government. The result of that transfer was that for all the purposes of the Act and the licence the appellants stood in the shoes of the original licensee. It was unnecessary to refer in detail to the provisions of the licence. The area of supply and compulsory area of supply were set out. No con dition of the licence (save one which was shortly after the grant of the licence complied with) was expressed to be a condition the breach of which was declared to render the licence liable to revocation. No material variation was made in any of the conditions set forth in the schedule to the Act. The distributing mains referred to in cl. VI (i.) of the schedule were duly laid down shortly after the grant of the licence, and thereupon the appellants began to supply electricity under the licence.
It appeared that the appellants were during the war faced with difficulties in the conduct of their undertaking. It was not necessary to consider their difficulties at length. Suffice it to say that at the end of 1941 the government demanded and received explanations as to an interruption in the supply, but there was nothing to show whether or not the government was satisfied with the explanations which were given. In December,
1942, the appellants informed their customers and the government that they proposed to shut down their works altogether on December 18 for the purpose of a thorough overhaul and stated that they anticipated resuming supply by January 1,
1943. On February 10, 1943, the government’s electrical engineer paid a visit of inspection to the appellants works and made a report to the government. Following on that report the following letter was, on April, 3 1943, sent by the government to the appellants
" 3rd April, 1943. " From
" The Deputy Secretary to the Government of Bombay, " Public Works Department.
"To
Law Rep. 76 Ind. App. 57 ( 1948- 1949) Hubli Electricity C ompany, Limited V. Province of Bombay 244
" Messrs. The Hubli Electricity Company, Limited. " Subject—Hubli Electric Licence, 1924. " Dear Sirs,
“The Electric Inspector, Bombay Province, who recently " visited your Company reports as under — " There is no qualified Engineer or other person in " charge of the Supply Companys station and works, either " electrical or mechanical. There are six generating " sets in the power house.
" Description of the Sets. Condition of the Sets.
" 1. 750 B.H.P. engine with Unserviceable owing to
600 KVA. generator. broken crankshaft.
" 2. 480 B.H.P. engine with Unserviceable owing to " 296 KW, generator. broken crankshaft.
" 3. 350 B.H.P. engine with Unserviceable, cylinder heads " 275 KVA. generator. and piston heads cracked.
" 4. 150 B.H.P. engine with Has been dismantled and new " 130 KVA generator. parts are being fitted from the Railway workshop.
" 5. 150 B.H.P. engine with The engine is in such bad " 130 KVA. generator. condition that not more than 60 KW load can be put on the generator.
“ 6. 115 B.H.P. engine with The set is in a very bad condition " 82 KVA. generator. and repairs are badly needed.
" ‘ It will be seen from the above that only one set " No. (5.), can be used for obtaining power, the maximum " being 60 KW against the Companys average peak load " of 180 KW.
“ 2. Government is satisfied that there are sufficient " grounds for revoking your licence under s. 4, sub-s. 1, " of the Indian Electricity Act but it is pleased to permit the " licence to remain in force under
s. 4, sub-s. 2, of the Act " su
