JUDGMENT - Singleton L., J.

1. The Madras Electric Supply Corporation Ltd., later referred to as the company, was incorporated under the Companies Acts, 1862-1900, on January 27, 1906, with the object of carrying on in India the business of an electric light and power undertaking in all its branches. The undertaking was carried on under three licences granted by the Government of Madras. Under the first two licences the local authority, with the sanction of the local government, had an option to purchase such portion of the undertaking as was in the area for which it was constituted, and a similar option was given to the local government if the local authority did not elect to purchase. Under the third licence the Governor-General in Council had the option to purchase. The option was exercisable in each case on August 29, 1947. The company carried on its business until that date. Notices to exercise the options were duly given.

2. On August 27, 1947, an agreement was entered into between the Government of Madras and the company, the effect of which is stated in paragraph 11 of the case : "..... it was declared and agreed (inter alia) as follows : - Clause I : that the Government of

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