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Issues Involved:
1. Definition and determination of "compensation." 2. Legislative competence and validity of the Oriental Gas Company Act. 3. Method of compensation determination under the amended Act. 4. Relevance of principles specified for compensation. 5. Payment of compensation in bonds and its implications. Detailed Analysis: 1. Definition and Determination of "Compensation": The primary issue revolves around the definition of "compensation" and its determination. The Court noted that the question of what constitutes compensation has been addressed through constitutional amendments and judicial precedents, narrowing the scope for controversy. The appellant argued that the principle of capitalizing net profit as the sole factor was not a relevant principle for determining compensation for a public utility undertaking. The Court, however, disagreed, stating that the principle of capitalization of net income is a sound and relevant principle for valuation, even if it might not yield the highest result for the owner. 2. Legislative Competence and Validity of the Oriental Gas Company Act: The appellant challenged the vires of the Act, questioning the legislative competence of the West Bengal State Legislature to pass the Act. The Calcutta High Court had previously upheld the validity of the Act, and the Supreme Court had also rejected the contention regarding legislative competence. The Court reiterated that the West Bengal Legislature had the authority to enact the law under Entry 42 of List III and Entry 25 of List II of the Seventh Schedule to the Constitution. 3. Method of Compensation Determination Under the Amended Act: The Oriental Gas Company Act was amended multiple times, changing the method of compensation determination. Initially, compensation was determined by the method of cost less depreciation or capitalisation, whichever was less. The 1968 amendment provided for compensation based on the full market value of the undertaking. The 1970 amendment reverted to the method of capitalisation, specifying eight times the average net income of the undertaking over the preceding five years. The appellant contended that this method was arbitrary and did not reflect the true value of the undertaking. 4. Relevance of Principles Specified for Compensation: The Court examined whether the principle of capitalizing net profit was relevant for determining compensation. It referred to various authorities and concluded that capitalisation of net profit is a recognized principle of valuation for public utility undertakings. The Court dismissed the appellant's argument that the principle was irrelevant, emphasizing that the basic consideration for any purchaser would be the profit-yielding capacity of the undertaking. 5. Payment of Compensation in Bonds and Its Implications: The appellant argued that the provision for payment in bonds payable in twenty years and carrying interest at 3% per annum effectively reduced the compensation, violating Article 31(2) of the Constitution. The Court acknowledged the force in this submission but noted that if Section 9(2) was severable from the rest of the Act, the State would have to make the payment in cash instead of bonds. The Court decided not to strike down Section 9(2) as ultra vires, leaving the matter unresolved but indicating that the provision might impair the guarantee of compensation. In conclusion, the Court upheld the method of compensation determination under the 1970 amendment, dismissed the appellant's writ petition, and awarded costs to the respondent.
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