9911796707
TMI Blog1972 (12) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... dy for immediate working and to the suitability of the same for the purposes of the undertaking. Accordingly, we direct that the award of the Umpire will stand amended to the extent that the fair market value of the appellant's undertaking shall be ₹ 23,81,670 plus ₹ 2,38,255, plus ₹ 5,26,962/60 that is to say ₹ 31,46,887/60. - Civil Appeal No. 1314 of 1967 - - - Dated:- 19-12-1972 - KHANNA, HANS RAJ, CHANDRACHUD, Y.V. AND VAIDYIALINGAM, C.A., JJ. For the Appellant : B. Sen and S. N. Mukherjee, For the Respondent : C. B. Agarwala, O. P. Rana and Ravinder Bana, JUDGMENT: CHANDRACHUD, J. On February 5, 1929 the Governor-in Council of the then Government of the United Provinces granted to Messrs. Martin Co. a licence under section 3 of the Indian Electricity Act, 1910 for supply of electric energy within the Districts of Bijnor and Moradabad. Messrs. Martin Co., who were Managing Agents of the apppllants company, assigned that licence to it. By a notice dated January 31, 1957 the Government of Uttar Pradesh exercised its option to purchase the Undertaking of the appellant on the expiry of two years from the date of the notice. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat on the date of purchase, the fair market value of the assets of the Undertaking was Rs. 23,81,670/-. As the appellant had already received a sum of rupees 15 lakhs from the respondent and as the respondent was entitled to a refund of Rs. 9,80,238/- on account of security deposits held by the appellant, the Umpire came to the conclusion by his award dated November 27, 1961 that the appellant had received Rs. 9,8,568/- in excess of the amount of the fair market value. On Issue No. 7, the Umpire accordingly held that the respondent had made an excess payment of the. aforesaid amount to the appellant which the latter was liable to refund with future interest as awarded. The appellant, by an application under section 30 of the Arbitration Act, 1940 challenged the validity of the award in the court of the Civil Judge, Moradabad on the ground that the Umire had legally misconducted himself in not awarding compensation for the service lines. The learned Judge upheld a part of the award, to the extent to which the market value of the Undertaking was fixed at Rs. 23,81,670/- but he set aside the rest of it. Obviously, he misunderstood the appellant's contention in regard to its right t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rry and Co. P. Ltd. v. The Union of India. (A.LR. 1971 S.C. 696) It is therefore plain that the appellant's application for setting aside the award can succeed only if there is an error of law on the face of the award. The other conditions of section 30 have no. bearing on the case. It is unnecessary to consider the comprehension of the expression "on the face of the award" because the Umpire has made a speaking award and there is no question here of the construction of a document incorporated in the award or appended to it. If it is transparent from the award that a legal proposition which forms its basis is erroneous, the award would be liable to be set aside. In order to find the true legal position, it is necessary to look at a few provisions of the Indian Electricity Act, 1910 (herein, "the Act"). Section 2(1) of the Act defines a' "service "line" as meaning any electric supply-line, through which energy is, or is intended to be, supplied (i) to a single consumer either from a distributing main or immediately from the supplier's premises or (ii) from a distributing main to a group of consumers on the same premises or on adjoining premises supplied from the same point of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne laid for the purpose of supply in pusuance of a requisition made by a consumer has to be maintained by the licensee, "notwithstanding that a portion of it may have been paid for by the person making the requisition"; the licensee, however, has the right to use such service fine "for the supply of energy to any other person". Under section, 8 of the Act, if neither the State Electricity Board nor the State Government nor the local authority is willing to purchase a licensee's undertaking and the licence is revoked, the licensee has the right to dispose of "all lands, buildings, works, materials and plant belonging to the undertaking in such manner as he may think fit". An interesting sidelight of the issue involved in this appeal is H that in 1923, the Government of India in its Department of Industries and Labour, had sought the opinion of the officiating Advocate-General, Bengal, on the, "question of ownership of the service line the cost of which has been paid for by the consumer". Shri B. L. Mitter who was then the officiating Advocate-General opined that "the property in a service line is in the licensee It makes no difference whether the consumer pays for any portion under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was entitled to the "payment of the value of all lands, buildings, works" etc. This section, along with certain others, was amended by the Electricity (Amendment) Act, 32 of 1959, which came into force on September 5, 1959. By this amendment, a new section 7A was inserted in the Act in order to provide for the "Determination of purchase price". Under the relevant part of sub-section (2) of that section, the market value of an undertaking is to be the value of all lands, buildings, works etc. other than "service lines. C .... which have been constructed at the expense of consumers". The appellant's undertaking having been acquired on 4/5 May, 1959, the provisions of old section 7 and not of the newly added section 7A would govern his rights. The Umpire made his award on November 27, 1961 relying, probably, on section 7A which had no application. Learned counsel for the respondent is right that even a mistake of law cannot vitiate the award unless the mistake is apparent on the face of the award. But here, the Umpire framed specific issues for decision, the first of these being: whether the respondent was "entitled to get a credit for the amount of consumers' contribution paid for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no justification for setting aside the entire award. Normally, we would have remitted the award for a decision in the light of our judgment but that is likely to involve undue delay and expense in a dispute which is pending since 1959. Learned counsel for the appellant was agreeable that we should ourselves amend the award. Learned counsel for the respondent demurred but- he was unable to indicate any cogent reason why we should not adopt a course which far from causing any prejudice to the parties, was clearly in the interests of justice. The Umpire has held that on the date of sale. the fair market value of the appellant's undertaking was Rs. 23 81.670. He arrived at this figure after excluding from the total market value, the sum of Rs. 2,38.255 which represented the consumers' contributions to the cost of laying the service lines. These contributions, according to him, were made from April 1, 1958 to March 31, 1959. The date of sale being 4/5 May, 1959 the consumers' contribution will roughly represent the market value of the service, lines even if, as, required by the first proviso to section 7(1) of the Act as it then stood, due regard is to be had to the nature and conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
