1968 (8) TMI 188 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of the notice issued under Section 7 of the Indian Electricity Act, 1910.
2. Compliance with the requirements of Section 7 to compel the sale of the undertaking.
3. Authority of the Bombay State Electricity Board and the appellant to exercise the right to purchase.
4. Impact of amendments and repeals on the rights acquired under the previous law.
5. Conditionality of the appellant's right to purchase on the payment of the price.

Detailed Analysis:

1. Validity of the Notice Issued Under Section 7 of the Indian Electricity Act, 1910:
The primary issue in this appeal is whether the notice issued by the Bombay State Electricity Board on January 8, 1959, under Section 7 of the Indian Electricity Act, 1910, was valid. The High Court had determined that the notice was valid under Section 7(4) of the Act but concluded that it was insufficient to compel the respondent to sell the undertaking. The Supreme Court disagreed with the High Court's interpretation, stating that the notice complied with the requirements of Section 7(4) and that the option to purchase and the election to purchase are part of a single integral process, not two independent steps.

2. Compliance with the Requirements of Section 7 to Compel the Sale of the Undertaking:
The High Court had held that the appellant needed to take two independent steps: (1) an election to purchase the undertaking followed by a notice to the respondent within the period mentioned in Section 7(4), and (2) exercise its option to purchase upon the expiration of the license period. The Supreme Court found this interpretation incorrect, stating that the exercise of the option to purchase and the election to purchase are one integral process. The notice given by the Bombay State Electricity Board on January 8, 1959, fulfilled the requirements of Section 7.

3. Authority of the Bombay State Electricity Board and the Appellant to Exercise the Right to Purchase:
The respondent contested the appellant's right to purchase the undertaking, arguing that neither the Bombay State Electricity Board nor the appellant had the authority to exercise this right. The Supreme Court examined Section 71 of the Electricity (Supply) Act, 1948, which transfers the right or option to purchase the undertaking from the State Government or local authority to the Board. The Court concluded that the appellant had acquired the right to purchase the undertaking by the combined operation of Section 7 of the Indian Electricity Act, 1910, and Section 71 of the Electricity (Supply) Act, 1948.

4. Impact of Amendments and Repeals on the Rights Acquired Under the Previous Law:
The respondent argued that the amendments to Section 7 of the Indian Electricity Act, 1910, and the repeal of Section 71 of the Electricity (Supply) Act, 1948, nullified the appellant's right to purchase. The Supreme Court held that unless expressly or by necessary implication, the new law had taken away the rights acquired earlier, Section 6 of the General Clauses Act would preserve those rights. The right to purchase the respondent's undertaking, which vested in the Bombay State Electricity Board and subsequently in the appellant, remained valid.

5. Conditionality of the Appellant's Right to Purchase on the Payment of the Price:
A new contention was raised in the Supreme Court that the appellant's right to purchase was conditional on the payment of the price as provided in Section 7. This issue was not addressed by the High Court and was left open for it to decide upon remand. The Supreme Court allowed the appeal, set aside the High Court's order, and remitted the case back to the High Court to decide the remaining issues, including the conditionality of the appellant's right to purchase on the payment of the price.

Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's order, and remitted the case back to the High Court for deciding the remaining issues. The costs of the appeal were to be costs in the cause.