1973 (10) TMI 58 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of the revocation of the electric supply license.
2. Requirement of due consultation with the State Electricity Board.
3. Preliminary objection regarding the new argument raised.
4. Consequence of premature consultation with the Board.
5. Interpretation of Section 4 of the Indian Electricity Act, 1910.

Issue-wise Detailed Analysis:

1. Validity of the Revocation of the Electric Supply License:
The appellant, proprietor of the Kottayam Electric Supply Agency, challenged the revocation of his license by the State of Kerala. The revocation was executed under Section 5(1)(a) of the Indian Electricity Act, 1910, effective from August 1, 1963, and was followed by an order to deliver the undertaking to the Kerala Electricity Board.

2. Requirement of Due Consultation with the State Electricity Board:
The appellant argued that the Board endorsed the State's proposal for revocation before his explanation was received and considered. The court found that the Board's recommendation was made without considering the appellant's explanation, which was a necessary step for due consultation. The court held that the Board should make its recommendation only after considering the explanation of the licensee, as mandated by Section 4 of the Act.

3. Preliminary Objection Regarding the New Argument Raised:
The respondents objected to the appellant raising a new point in the Supreme Court that was neither raised in the writ petition nor before the High Court. The court found that the point was embedded in the affidavit accompanying the petition and was understood and addressed by the respondents in their affidavits. Therefore, the court allowed the point to be raised as it went to the root of the matter.

4. Consequence of Premature Consultation with the Board:
The court examined whether the premature consultation with the Board rendered the revocation order void. It concluded that the consultation with the Board is a mandatory condition precedent for revoking a license. The breach of this condition, i.e., consulting the Board before receiving the appellant's explanation, made the revocation order void. Consequently, the order for acquisition of the undertaking also fell.

5. Interpretation of Section 4 of the Indian Electricity Act, 1910:
The court analyzed the amended Section 4, which requires the State Government to consult the State Electricity Board before revoking a license. The court emphasized that the Board, being an independent body with technical, financial, and administrative expertise, must consider the licensee's explanation before making any recommendation. The court rejected the argument that the Board's consultation was only regarding 'public interest' and affirmed that the consultation must occur after receiving the licensee's explanation to ensure a fair and unbiased decision.

Conclusion:
The Supreme Court allowed the appeal, setting aside the High Court's order. It quashed the notice, the revocation order, and the order directing the appellant to hand over the undertaking to the Board, due to the lack of proper consultation with the Board as required by Section 4 of the Act. The appellant was not awarded costs as the decisive point was not raised in the High Court.