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CASE NO.:

Appeal (civil) 312 of 2002

PETITIONER:

Guntur Tobaccos Ltd

RESPONDENT:

The Transmission Coprn. of A.P. & Anr

DATE OF JUDGMENT: 11/04/2008

BENCH:

A.K. MATHUR & ALTAMAS KABIR

JUDGMENT:

J U D G M E N T

CIVIL APPEAL NO. 312 OF 2002

Altamas Kabir,J.

1. This appeal, by way of special leave, is

directed against the judgment and order dated 29th

December, 2000, passed by the Division Bench of

the Andhra Pradesh High Court in Letters Patent

Appeal No. 78 of 1988, which was preferred against

the order passed by the learned single Judge in

A.S. No. 610 of 1979 on 24th June, 1987.

2. As it appears from the materials on record, the

appellant herein, Guntur Power and Light Limited,

hereinafter referred as "GPL", was incorporated for

the purpose of running an Electrical Undertaking to

supply electricity to the Guntur area of Andhra

Pradesh. It was granted a licence for the aforesaid

purpose under the provisions of the Indian Electricity

Act, 1910 and acquired various properties for the

Undertaking.

3. In 1938, GPL ceased to generate electricity and

it confined itself only to distribution of power.

Receiving and distributing stations were located in

places belonging to the GPL, outside the properties

forming the subject matter of the present appeal. It

is the categorical case of the appellant herein that

the said properties were not used by GPL for the

purposes of the Electricity Undertaking or for any

other ancillary purpose from the year 1939 onwards.

4. On 3rd August, 1945, GPL granted a lease in favour

of Guntur Tobacco Company, hereinafter referred to as

"GTC", a sister company, in respect of two acres of

land with right to construct buildings thereon in

terms of Clause 5 of the registered Lease Deed and

also with an option to purchase the demised land in

terms of Clause 8 thereof. By another registered

Lease Deed executed by GPL in favour of GTC on 4th

November, 1949, a further portion of vacant land

measuring one acre was also demised in favour of GTC,

which is the appellant in these proceedings.

Subsequently, two more lease deeds were executed by

GPL in favour of GTC on 15th March, 1950 and 18th March,

1954, extending the period of the lease till the end

of the year 1971. In the Lease Deed of 18th March,

1954, clause 8 containing the option of purchase was

substituted by a new clause, which, inter alia,

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provided that even if the lessors came to be wound up

voluntarily or went into liquidation or became

insolvent, or if the lessors ceased to carry on

business, the lease would not terminate but would

remain in full force with the right to the lessees to

purchase the demised lands and buildings and

structures thereon belonging to the lessors at the

market value or be entitled to repayment of the market

value of the buildings and super structures which may

be put up by the lessees.

5. In 1956, the Government of Andhra Pradesh

acquired the Electrical Undertaking from GPL in

exercise of its powers under the Andhra Pradesh

Electricity Supply Undertaking Acquisition Act, 1954,

whereupon the Undertaking of GPL vested in the State

Government with effect from 1st May, 1956. Upon such

vesting, the demised premises, along with the land and

buildings situated thereupon, became the property of

the State Government by virtue of such acquisition.

The Transmission Corporation of Andhra Pradesh, being

the respondent No. 1 herein, was formed on 1st April,

1959, under Section 5 of the Electricity Supply Act,

1948, and pursuant to its policy the State Government

transferred the Undertaking of GPL with all its assets

to the Andhra Pradesh State Electricity Board, which

became the owner of the said properties.

6. Even after formation of the respondent No. 1

Corporation, GTC continued to remain in possession of

the properties in que