1954 (2) TMI 12 - SC - Indian Laws

whether the Madras Electricity Supply Undertakings (Acquisition) Act, 1949 was a law with respect to electricity under entry 31 of the concurrent list or with respect to corporations under entry 33 in list I? Held that - If power inhered in the Federal Legislature to make a law for the acquisition of any property for any purpose connected with a matter with respect to which it had power to make laws then section 127 would not have been necessary at all. The absence of any entry empowering any Legislature to make laws with respect to compulsory acquisition of a commercial or industrial undertaking and the provisions of section 127 to, which reference has just been made make it abundantly clear that the contentions urged by the learned Advocate-General cannot possibly be sustained. In our opinion, therefore, it must be held that the Madras Legislature had no legislative competency to enact the impugned law. Appeal allowed.

Summary

Issues:
- Legislative competency of the Madras Legislature to enact the Madras Electricity Supply Undertakings (Acquisition) Act, 1949.

Analysis:
The judgment delivered by the Supreme Court involved an appeal arising from a judgment of the Madras High Court regarding the validity of the Madras Electricity Supply Undertakings (Acquisition) Act, 1949. The appellant company challenged the Act's validity on the grounds of legislative competency, public purpose, and compensation adequacy. The High Court rejected the appellant's contentions, holding that the Act fell within the legislative competence of the Madras Legislature and that the challenge based on public purpose and compensation was precluded due to the President's certification. The High Court, however, found certain sections and rules under the Act invalid but dismissed the appellant's application. The appellant appealed to the Supreme Court, focusing solely on the legislative competency issue.

The Supreme Court analyzed the Act's provisions and found that it primarily dealt with the acquisition of electrical undertakings, not licensing or regulation of electricity. The Court noted that the Act did not fall under any specific entry in the legislative lists regarding compulsory acquisition of commercial or industrial undertakings. The Court highlighted that the Governor-General's discretionary power under section 104 was not exercised to authorize the Madras Legislature to enact the Act, indicating a lack of legislative competency.

The Court addressed the argument presented by the Advocate-General of Madras, asserting that each entry in the legislative lists carried inherent powers to legislate on ancillary or incidental matters. However, the Court emphasized that under entry 9 in list II, the power of Provincial Legislatures was limited to compulsory acquisition of land only, without explicit authority for commercial or industrial undertakings. The Court referred to section 127 of the Government of India Act, 1935, to support its conclusion that the Madras Legislature lacked the authority to enact the impugned law.

Consequently, the Supreme Court held that the Madras Legislature did not have the legislative competency to enact the Madras Electricity Supply Undertakings (Acquisition) Act, 1949. As a result, the Court allowed the appeal, with costs awarded to the appellant in both the High Court and the Supreme Court.

In conclusion, the judgment focused on the legislative competency issue, highlighting the lack of authority of the Madras Legislature to enact the Act concerning the acquisition of electrical undertakings, ultimately leading to the appeal being allowed.