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HIGH COURT OF CALCUTTA
SANKAR PRASAD MITRA, SABYASACHI MUKHERJI
JABBALPORE ELECTRIC SUPPLY CO. LTD. - Appellant
Versus
MADHYA PRADESH ELECTRICITY BOARD - Respondent
Appeal 95 Of 1973
Decided On : MAY 2, 1974
ELECTRICITY (SUPPLY) ACT, 1948 - SECTIONS 28, 29, 32, 34, 36, 37, 47 - FIRST SCHEDULE - CLAUSES I (1) (B), (C), VII, XVI, XVII (B) - SCHEME - CONTROLLED STATION - DESIGNATION - VALIDITY - AGREEMENT BETWEEN LICENSEE AND GOVERNMENT - EFFECT - CLOSURE OF GENERATING STATION - NOTICE - VALIDITY - TAKING OVER OF GENERATING STATION - VALIDITY.
Fact of the Case:
The appellant, a licensee for generation and supply of electricity, challenged the orders of the Madhya Pradesh Electricity Board (respondent No. 1) designating its generating station as a controlled station, combining it with the Board's own generating station, closing it down permanently, and taking it over and purchasing it. The appellant contended that the designation order was void as the scheme under which it was made was not in force, and that the agreement between it and the Government prevented the application of the First Schedule to the Act to its controlled station. The Board argued that the scheme was in force when the designation order was made and that the agreement did not restrict its rights under the Act.
Finding of the Court:
The Court held that the scheme was in force when the designation order was made, as it had been duly sanctioned and published in accordance with the provisions of Section 29 of the Act. The Court also held that the agreement between the appellant and the Government did not prevent the application of the First Schedule to the appellant's controlled station, as it was not an alternative arrangement with a licensee in an area in which a scheme was in force on the date of the agreement. The Court further held that the order combining the appellant's generating station with the Board's own generating station was invalid as it was not made under the relevant provisions of the First Schedule. The Court also held that the order closing down the appellant's generating station permanently was valid as it was made in compliance with the provisions of Section 36 of the Act and Clause XVI of Part III of the First Schedule. Finally, the Court held that the order taking over and purchasing the appellant's generating station was also valid as it was made in accordance with the provisions of Section 37 of the Act and Clauses XVI and XVII (b) of Part III of the First Schedule.
Issues: 1. Whether the scheme under which the appellant's generating station was designated as a controlled station was in force when the designation order was made? 2. Whether the agreement between the appellant and the Government prevented the application of the First Schedule to the Act to its controlled station? 3. Whether the order combining the appellant's generating station with the Board's own generating station was valid? 4. Whether the order closing down the appellant's generating station permanently was valid? 5. Whether the order taking over and purchasing the appellant's generating station was valid?
Ratio Decidendi: 1. A scheme comes into force when it is duly sanctioned and published in accordance with the provisions of Section 29 of the Electricity (Supply) Act, 1948. 2. An agreement between a licensee and the Government does not prevent the application of the First Schedule to the Act to the licensee's controlled station, unless it is an alternative arrangement with a licensee in an area in which a scheme was in force on the date of the agreement. 3. An order combining a licensee's generating station with the Board's own generating station is invalid if it is not made under the relevant provisions of the First Schedule. 4. An order closing down a licensee's generating station permanently is valid if it is made in compliance with the provisions of Section 36 of the Act and Clause XVI of Part III of the First Schedule. 5. An order taking over and purchasing a licensee's generating station is valid if it is made in accordance with the provisions of Section 37 of the Act and Clauses XVI and XVII (b) of Part III of the First Schedule.
Final Decision: The appeal was partly allowed. The order combining the appellant's generating station with the Board's own generating station was struck down and declared invalid. The orders designating the appellant's generating station as a controlled station, closing it down permanently, and taking it over and purchasing it were upheld.
( 1 ) THIS is an appeal from the judgment of P. K. Banerjee, J. , delivered on May 9, 1972, on an application of the appellant under Article 226 of the Constitution challenging certain orders of the Madhya Pradesh Electricity Board. The learned Judge has dismissed the application so far as the main prayers are concerned but has made the rule absolute with respect to a portion of the order/ notice of the respondent No. 1 dated the 29lh February, 1968, to the appellant for permanent closing down of the appellant's controlled station. By this order/notice the appellant was intimated that the respondent No. 1 would take over and purchase the Jubbalpore Generating Station along with lands, buildings and structures pertaining to the said generating station and its premises "including associated office buildings, store buildings, workshops etc. " The Learned Judge has struck down the words "including associated office buildings, Store Buildings, Workshop etc. " There is no cross appeal against this order and we have to proceed on the footing that by the order/notice of the 29th February 1968, the respondent No. 1 purported to take over and purchase the Jubbalpore Generating Station along with lands, buildings and structures pertaining to the said generating station, and its premises. The application under Article 226 of the Constitution was moved on the 26th March, 1968. The Learned Judge has refused to interfere with the orders/notices passed or given prior to the order/notice of the 29th February, 1968 and culminating in the said order/notice principally on the ground of delay. As the validity of the last order/notice dated the 29th February, 1968, was dependent on the validity of the previous orders/notices, the aforesaid last order/ notice was not interfered with except to the extent indicated above.
( 2 ) LET us now briefly discuss the facts of this case. The appellant was a licensee for generation and supply of electricity granted by the Government of Central Provinces and Berar to Martin and Co. on the 30th August, 1925. The licence was to he cited as the Jubbalpore Electric Licence, 1925. In 1927, pursuant to this licence, a generating plant and/or station was installed by the appellant at Jubbalpore.
( 3 ) ON the 6th August, 1949, the appellant Jubbalpore Electric Supply Co. Ltd. , having its registered office at 12, Mission Row in Calcutta entered into an agreement with the Governor of Central Provinces and Berar, inter alia, for supply of electrical energy to the Jubbalpore-Katni area and such areas as might subsequently be added to the same. Clause 16 of this agreement was as follows:--"subject to the provisions contained in Clause 23 hereof, this agreement shall remain in force for a period of 20 years from the date of commencement of supply and unless then terminated by at least 12 calendar months' previous notice shall continue in force thereafter for subsequent periods of seven years until determined by either party at the end of any such period of 7 years by giving to the other party at least 12 months' clear notice in writing. "
( 4 ) WE are not concerned in this appeal with Clause 23 of the agreement. In 1952, the Madhya Pradesh Electricity Board the respondent No. 1 herein was constituted under the provisions of the Electricity (Supply) Act, 1948.
( 5 ) THE third proviso to Clause 11 of the agreement of the 6th August, 1949, provided that the Government might take over from the agent that is the Jubbalpore Electric Supply Co. Ltd. , any or all the functions of the agent at any time by giving the agent not less that 6 months' prior notice of its intention to do so. On the 1st November, 1957, the respondent No. 1 gave notice to Messrs. Martin Burn Ltd. , that it had decided to take over the agency functions in terms of Clause 11 of the agreement and was giving notice as required by the third proviso to the said Clause 11. The Board was also prepared to take over the functions of the ag
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