The State cannot acquire any debt or chose in action due to it from citizens, for that would be only for the purpose of augmenting the State revenue or reducing the State expenditure which will not be a public purpose and, as such, void under Article 31(2) of the Constitution.

( 1 ) THE appellant, the Bihar Slate Electricity Board has, in this appeal, challenged the propriety of the judgment of Sabyasachi Mukharji, J. whereby the learned Judge made the Rule Nisi issued on the application under Article 226 of the Constitution of the respondents Nos. 1 and 2, the Patna Electric Supply Company and one of its directors, absolute.

( 2 ) ON Feb. 6, 1924, a licence was granted by the Government of Bihar to Octaviua Steel and Co. Ltd. for the supply of electrical energy. The laid licence was transferred in favour of the respondent No. 1, the Patna Electric Supply Co. Ltd. On Jan. 5, 1973, the Bihar State Electricity Board served a notice upon the company under Sub-section (1) of Section 6 of the Electricity Act, 1910 (hereinafter referred to as the Act), requiring the company to sell the undertaking to the Bihar State Electricity Board on the expiry of the period of 50 years from the commencement of the licence, that is, at 12 O'clock in the night between the 5th and 6th Feb. , 1974 and further to deliver possession of the undertaking on the expiration of the above period of 50 years pending the determination and payment of the purchase price.

( 3 ) AT this stage, it is necessary to refer to some of the provisions of the Act and the amendments made thereto in order to appreciate the respective cases of the parties.

( 4 ) SECTION 6 (1) of the Act provides as follows :"6 (1 ). Where a licence has been granted to any person, not being a local authority, the State Electricity Board shall,-- (a) in the case of a licence granted before the commencement of the Indian Electricity (Amendment) Act, 1959, on the expiration of each such period at is specified in the licence; and (b) in the case of a licence granted on of 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, at shall be specified in this behalf in the licence; 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 leu than one year requiring the licensee to sell the undertaking to it at the expiry of the relevant period referred to in this Sub-section. " Sub-sections (2), (3), (4) and (5) of Section 6 inter alia provide that the State Electricity Board will be entitled to exercise the option of purchasing the undertaking if the State Government or any local authority constituted for an area within which the whole of the area of supply is included refused or elected not to purchase the undertaking. Sub-sections (6) and (7) provide as follows:" (6 ). Where a notice exercising the option of purchasing the undertaking has been served upon the licensee under this section, the licensee shall deliver the undertaking to the State Electricity Board, the State Government or 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. (7 ). Where an undertaking is purchased under this section, the purchaser shall pay to the licensee the purchase price determined in accordance with the provisions of Sub-section (4) of Section 7-A. "section 7 of the Act inter alia provides for the vesting of the undertaking in the purchaser upon the completion of the sale or on the date on which the undertaking is delivered to the intending purchaser whichever is earlier. Sub-section (1) of Section 7-A is as follows:"7-A. 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 there is any difference or dispute regarding such pu