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High Court Of Calcutta
D. K. SEN, S. K. SEN
U.P.S.E.BOARD - Appellant
Versus
UPPER JUMNA, VALLEY ELECTRICITY SUPPLY CO.LTD. - Respondent
A. F. O. O. 6 Of 1983
Decided On : 09/17/1987
The impugned Amending and Validating Acts suffer from a further infirmity inasmuch as the provisions of the same have been made applicable only to cases where the purchase price of an undertaking has not been determined prior to the commencement of the impougned legislation. This is provided for in S. 7 of the Amendment Ordinance and reproduced in Amendment Acts noted earlier. It is a matter of chance whether, in any particular case, the purchase price of an undertaking would or would not have been determined under the law as it stood prior to the promulgation of the impugned legislation.
Fact of the Case:
The appellant, the Uttar Pradesh State Electricity Board, exercised its option to purchase the electricity undertakings of the respondent, the Upper Jumna Valley Electricity Co. Ltd., on 30th Nov. 1962. The said undertakings were taken over by the appellant on the midnight of 27th/28th June 1964. Disputes and differences arose between the appellant and the respondent as to the quantum of the market value of the undertakings of the respondent. Such disputes and differences were referred to arbitration and during the pendency of the proceedings in arbitration the impugned Ordinances and Acts were promulgated by the State of Uttar Pradesh, the respondent No. 4. The impugned Amending and Validating Acts provided that the amount payable for take over and purchase of the undertakings would be determined mainly on the basis of depreciated book value of the assets of the undertakings and not their market value.
Finding of the Court:
The impugned Amending and Validating Acts are unconstitutional and void as they take away the vested right of the respondent to receive the market value for its undertakings without providing for compensation. The impugned Acts are also discriminatory and arbitrary as they treat differently owners of electricity undertakings whose claims for compensation under the earlier law are in the process of determination and owners of undertakings whose similar claims have been determined but not paid.
Issues: Whether the impugned Amending and Validating Acts are unconstitutional and void as they take away the vested right of the respondent to receive the market value for its undertakings without providing for compensation.
Ratio Decidendi: The impugned Amending and Validating Acts are unconstitutional and void as they take away the vested right of the respondent to receive the market value for its undertakings without providing for compensation. The impugned Acts are also discriminatory and arbitrary as they treat differently owners of electricity undertakings whose claims for compensation under the earlier law are in the process of determination and owners of undertakings whose similar claims have been determined but not paid.
Final Decision: The appeal is dismissed and the judgement and order dt. 19th July 1982 under appeal is affirmed. The appellant is directed to take appropriate proceedings in accordance with law to determine the market value of the undertakings of the respondent as on 27th/28th June 1964 and make payment to the respondent on the basis of the same.
( 1 ) THE material facts and proceedings leading up this appeal are, inter alia, that the Government of United Provinces of Agra and Oudh, the predecessor of the present Government of Uttar Pradesh granted a licence under the Indian Electricity Act, 1910, dt. the 28th June 1929, for generation and distribution of electricity in the districts of Saharanpur, Muzaffarnagar and Meerat in the then province of Uttar Pradesh in favour of one Martin and Co. The said Martin and Co. assigned the said licence in favour of Upper Jumna Valley Electricity Co. Ltd. the respondent No. 1 herein, whereupon the latter became a licensee within the meaning of the said Act of 1910.
( 2 ) UNDER cl. 12 (l) of the said Licence an option was conferred on the State Government to purchase the electricity undertakings of the licensee after the expiry of 35 years from the commencement of the licence and also on the expiration of every subsequent period of 20 years during the subsistence of the licence on one years notice and upon payment of the market value thereof at that time.
( 3 ) THE respondent 1 set up its undertakings at Saharanpur, Muzaffarnagar, and Meerat for supply and distribution of electricity in the specified areas and had been Supplying and distributing electricity in terms of the said licence till the midnight of the 27th/28th June, 1964.
( 4 ) ON the 1st April 1959, the U. P. State Electricity Board the appellant was constituted under S. 5 of the Electricity Supply Act of 1948 (hereafter referred to as the said Act of 1948 ).
( 5 ) THE right or option to purchase the undertakings of the respondent No. 1 vested in the appellant under S. 6 (1) of the Act of 1910 after the constitution of the appellant.
( 6 ) ON the 30th Nov. 1962, the appellant issued a notice to the respondent 1 under S. 6 (1) of the Act of 1910 requiring the respondent 1 to sell its undertakings to the appellant with effect from the date of the expiration of 35 years computed from the commencement of the said licence dated the 28th June 1929. The said period expired on the midnight of the 27th/28th June 1964.
( 7 ) AT the midnight of the 27th/28th June 1964, possession of the said undertakings was taken over by the appellant and a sum of Rs. 9,36,868. 86 p. was paid by the appellant to the respondent No. 1.
( 8 ) THE respondent No. 1 valued its said undertakings including solatium payable under S. 7a (4) of the said Act of 1910 at Rs. 91,40,480. 79 p. and claimed the same from the appellant under Sub-Ss. (1) and (2) of S. 7a of the said Act of 1910. The said claim of the respondent No. 1 was not accepted by the appellant. Disputes and differences between the appellant and the respondent on the amount payable for the taking over of the said undertakings were referred to arbitration as provided in S. 7a (1) of the said Act of 1910.
( 9 ) BOTH the appellant and the respondent No. 1 appointed their respective arbitrator who entered into the reference. The arbitrators appointed a former Judge of the Allahabad High Court as the Umpire. On the 5th July 1972 there was a difference of opinion between the arbitrators. The respondent No. 1 called upon the Umpire to enter into the reference. The Umpire duly entered into the reference and issued notices to the parties to appear before him on the 12th Nov. 1972 and thereafter on the 22nd Nov. 1972. The appellant who did not appear before the Umpire moved the Civil Judge, Lucknow and obtained an interim injunction restraining the Umpire from proceeding with the arbitration.
( 10 ) THE said application of the appellant was ultimately dismissed by the Additional Civil Judge (Small Cause Court) Lucknow on the 14th Feb. 1974. The appellant, thereupon, moved in revision before the District Judge, Lucknow, against the said order of dismissal.
( 11 ) THEREAFTER a number of Ordinances and Acts were promulgated by the Government of Uttar Pradesh by which the said Act of 1910 were amended. The relevant provisions of
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