The right to compensation for the acquisition of property under Article 31(2) of the Constitution cannot be taken away without providing just and reasonable compensation.

ORDER :- The question involved in this application under Art.226 of the Constitution, is, whether the petitioner No. 1 is entitled to compensation in accordance with the provisions of the Indian Electricity Act, 1910 for the right of option exercised by the respondents. Originally, in the petition, the petitioners had also challenged the exercise of that option but during the hearing of this application on behalf of the petitioners that challenge was not pressed.

2. This application is by two petitioners, one, being Patna Electric Supply Co. Ltd. and another being a director and shareholder of the said company, In order to appreciate the challenge, if may be necessary to refer to certain facts. It appears that an the 6th Feb. 1924, a licence was granted by the Government of Bihar to M/s. Octavius Steel and Co. Ltd. for the supply of Electrical energy. There was a notification on the 13th Feb. 1924 in respect of grant of the said licence and the said licence was thereafter transferred in favour of the petitioner No. 1. A notice was published by the Government of Bihar relating to certain proposed amendments to be made to the said licence dated 6th Feb. 1924. It is not necessary for the purpose of this application to set out the said amendments. The petitioner No. 1, however, on the 27th Nov. 1972 objected to the amendments proposed in the notice. On the 5th Jan. 1973 a notice was given by the respondent No. 1 purporting to exercise option to purchase the under-taking of the petitioner No. 1 on the expiration of 50 years from the date of commencement of the said licence and the petitioner No. 1 was required to deliver possession of the said undertaking at 12 Oclock in between the 5th and 6th Feb. 1974 pending determination and payment of purchase price. It is, therefore, necessary to refer to the relevant election which authorises exercise of such option. Section 6 of the Indian Electricity Act, 1910 permits purchase of the undertaking and for my present purpose it would be sufficient if I set out Section 6(1) of the Act which reads as follows :

Section 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 option shall be exercised by the State Electricity Board serving upon the licensee 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 red to in this Sub-Section".

Sub-Section (6) of Section 6 provides as follows :

Section 6 (6); Where a notice exercising the option of purchasing the under taking has been served upon the licensee under this Section, the licensee shall deliver the undertaking to the State Electricity Board, the State Government of 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."

If an option is exercised, in the manner indicated, under Section 6 then the determination of the purchase price has to be made under Section 7A of the said Act. The said Section reads as follows :

"Section 7A. (1) Where an undertaking of a licensee not being a local authority, is sold under Sub-Section (1) of Section 5, the purchase price of the undertaking shall be the market value of the undertaking at the time of purchase or where the undertaking has been delivered before the purchase under Sub-Section (3) of that Section, at the time of the delivery of the undertaking and if the