IMPORTANT POINT
Bharat Hydro Power Corporation Limited (Acquisition and Transfer of Undertaking) Act, 1996 held constitutionally valid legislation.

Headnote:Bharat Hydro Power Corporation Limited (Acquisition and Transfer of Undertaking) Act, 1996-Sections 4, 5, 6, 8, 9, 11, 12, 23 and 24-Constitutional validity-Proposal of Assam State Electricity Board for construction of a Hydro Electric Power Station-Delay in completion of project-A new company in name and style of M/s. Bharat Hydro Power Corporation came into existence-Disputes between the Electricity Board and appellant company-Inordinate delay in completion of project-State of Assam, to safeguard public interest by completing the project, promulgated Bharat Hydro Power Corporation Ltd. (Acquisition and Transfer of Undertaking) Ordinance, 1996, acquiring undertaking a Project of appellant-Ordinance subsequently replaced by the Act of 1996-On 1.12.1996, State Government by Notification transferred to and vested the said project in the Board-Writ petitions challenging constitutional validity of the Act being ultra vires and violative of Articles 14 and 19(1)(g) of the Constitution and on ground of being vague, unfair and arbitrary-Prayer made that the Act be struck down being unconstitutional and beyond legislative power of the State and/or inoperative and void in law-Single Judge passed a detailed order striking down Sections 3, 4, 5, 6, 7, 7A, 15(2), 23 and 24 of the Act being repugnant to Central Acts-Impugned Act and Central Electricity Acts operate in two different fields without encroaching on each other s field-Both the Acts can operate simultaneously-Electricity Act, 1910 and 1948.
       Held : Without entering into the controversy whether the State Act would fall under Entry 17 of List II or under Entry 38 of List III and assuming (but not holding that it falls under Entry 38 of List III) we examine as to whether there is any conflict between the provisions of the Central Act and the State Act. If there is no conflict at all the question of repugnancy would not arise. The State Act has been enacted to take over the Bharat Hydro Power Corporation in public interest as it could not complete the project within time so that the State could efficiently supervise manage and execute the work expeditiously to subserve the common good, in the context of the acute power shortage in the State. The State after taking over the project had the power to hand it over to the Board for completing the project. Provision has been made to pay adequate compensation which is to be determined by a Commission constituted under the Act for payment of adequate compensation. Contention raised on behalf of the appellants is that Central Act makes specific provisions for compulsory purchase of undertaking and a detailed procedure has been prescribed and the State Act has created a parallel procedure for purchase of the undertaking thereby impinging on the Central Act and is therefore repugnant to the Central Act. We do not find any substance in this submission. (Paras 27 and 28)
       The impugned Act and the Central Acts in the instant case operate in two different fields without encroaching upon each other s field in as much as the true nature and character of the impugned State Act is to acquire the undertaking and pay compensation as provided in the Act whereas both the Central Acts (Acts of 1910 and 1948) have made general provisions with regard to supply and use of electrical energy. The provisions regarding purchase of undertaking in the Act of 1910 would not be applicable as the appellants are not licensees within the meaning of the Act of 1910. There is not even a semblance of conflict what to talk of direct conflict between the impugned State Act and the Central Acts to bring about the situation where one cannot be obeyed without disobeying the others. Both the Acts can operate simultaneously as they do not occupy the same field. As the enactments operate in two different fields without encroaching upon each other s field there is no repugnancy. Since there is no repugnancy the question of the State Act being kept for the consideration of the President or receiving his assent did not arise. (Paras 38 and 39)

JUDGMENT

Bhan, J.-These appeals are directed against a common judgment passed by the Division Bench of the High Court of Gauhati wherein the Division Bench while setting aside the judgment of the learned Single Judge dated 19th July, 1997 has dismissed the writ petition filed by the appellants. The writ petition was filed by the appellants challenging the constitutional validity of the Bharat Hydro Power Corporation Limited (Acquisition and Transfer of Undertaking) Act, 1996 being Assam Act 1 of 1997 published in the Assam Gazette Extraordinary dated 6th January, 1997.

Facts :

2. In the year 1979, the Planning Commission of India sanctioned a proposal of the Assam State Electricity Board (hereinafter referred to as the Board ) for construction of a Hydro Electric Power Station in the District of Karbi Anglong on the river Barapani at an estimated cost of Rs. 36.36 crores. The project comprised construction of 51 meter high concrete dam on the river Barapani near Hatidubi for utilising flow of water from catchment area of 1178 Sq. km. The installed capacity of the project was 2 x 50 MW. The dam was to be completed in the year 1986, but due to the failure of the local contractor, the project could not be completed and the Board terminated the contract and protracted litigation ensued.

3. In the year 1992, after termination of the contract as aforesaid, the project was entrusted to National Project Construction Corporation (in short NPCC ), but the similar fate followed and Board had to terminate their contract as well in December, 1992. In the mean time, cost of the project initially sanctioned at Rs. 36.36 crores rose to Rs. 189.90 crores. Out of the aforesaid estimate, the work completed was of about Rs.116 crores and the Board needed about Rs. 60 crores to complete the project excluding other liabilities. The Board could not generate the additional fund required for completing the project.

4. The Central Government in the year 1992-93 accepted the policy of privatisation even in the power sector. The State Government following the policy of privatisation of the Central Government decided to transfer the project to joint sector.

5. On 25th March, 1993, Memorandum of Undertaking (MOU) was signed between the Board, Government of Assam and M/s Subhash Project and Marketing Limited (SPML), appellant No.2 herein. According to the said MOU, SPML was to promote a new company to complete the project. In terms of the said MOU a pew company under the name and style of M/s. Bharat Hydro Power Corporation Limited (hereinafter referred to as appellant No. 1 ) came into existence in which the equity participation was as follows:

ASEB (the Board) - 11

SPML (appellant No.2) - 40

General Public - 49

6. On 8th April, 1993 the Deed of Assignment was executed between the Board and the appellant No. 1, in terms of which all the assets and liabilities of the project were transferred to appellant No.1 w.e.f. 8.4.1993. In terms of the said Deed of Assignment appellant No.1 was to complete the project and start generation by June, 1995 which was subsequently extended to June, 1996. Disputes arose between the parties. According to Board as well as the State of Assam, the appellant No. 1 after its incorporation failed to take charge of the project till 5th April, 1994. Even after taking over of the project, the appellant No.1 could not achieve any progress towards completion of the project due to serious lapses and negligence on its part. On the other hand, appellants Nos. 1 & 2 put the entire blame on the Board and the State Government for the delay in the progress of the project.

7. On 20th December, 1995, appellant No.1 filed a suit being TS No. 244/96 in the Court of the Assistant District Judge No.1, Guwahati for specific performance of the contract against the Board alleging that the Board was remiss in the performance of its obligation under the MOU and the Deed of Assignment. Board filed an applicati

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2004 Supreme(SC) 29

IMPORTANT POINTBharat Hydro Power Corporation Limited (Acquisition and Transfer of Undertaking) Act, 1996 held constitutionally valid legislation.

Cases Referred (7)

IMPORTANT POINT
Bharat Hydro Power Corporation Limited (Acquisition and Transfer of Undertaking) Act, 1996 held constitutionally valid legislation.