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1969 DIGILAW 201 (ALL)

Barabanki Electric Supply v. Uttar Pradesh State Electricity

1969-07-21

C.D.PAREKH, S.N.DWIVEDI

body1969
JUDGMENT S.N. Dwivedi, J. - The appellant, M/s. the Barabanki Electric Supply Company Limited, Barabanki (hereinafter called the Company) is a company registered under the Indian Companies Act. The Company was granted a licence for supply of electrical energy. The licence was granted in October, 1939 by the U. P. Government under the Indian Electricity Act, 1910. The licence is called by the name of 'the Barabanki Electric Licence, 1939'. 2. It was issued through the medium of a notification. It is notification No. 3404-EI-29-1939. It bears the date of October 7, 1939. As required by the rules, it was published in the Gazette, dated October 14, 1939. 3. According to Clause 12 (1) of the licence, it was to end 'on the expiration of 25 years from the date of notification of this licence'. The Indian Electricity. Act, 1910 was amended by the Indian" Electricity (Amendment) Act (32 of 1959) . The latter Act inserted Section 4-A in the former Act. Section 4-A empowered the State Government to amend the licence in certain circumstances. In 1964 the State Government, acting under this section, amended Cl. 12 (1) of the Licence. The amendment related to the duration of the licence. By the amendment, the words 'on the expiration of 25 years from the date of notification of this licence' were substituted by the words "twenty-eight years and six months computed from October 7, 1939." The substituted period would expire on April 6, 1968. 4. Section 7 of the Indian Electricity Act, 1910 gave an option, inter alia, to the State Government to purchase the Company's undertaking for supply of electrical energy on the expiry of the period mentioned in Clause 12 (1) of the licence. Section 7 required the Government to give a notice to the Company for purchasing the undertaking. It was at least two years notice. 5. The Act of 1959 amended Sections 6 and 7 of the Indian Electricity Act, 1910. The amended Section 7 no more deals with the option to purchase the undertaking. The option is now the subject-matter of the amended Section 6. The relevant portion of Section 6 reads. It was at least two years notice. 5. The Act of 1959 amended Sections 6 and 7 of the Indian Electricity Act, 1910. The amended Section 7 no more deals with the option to purchase the undertaking. The option is now the subject-matter of the amended Section 6. The relevant portion of Section 6 reads. " (1) Where a licence has been granted to any person, ........the State Electricity Board shall,- (a) in the case of a licence granted before the commencement of the Indian Electricity (Amendment) Act, 1959, on the expiration of each such period as is specified in the licence; ............. have the option of purchasing the undertaking and such option shall be exercised by the State Electricity Board serving upon the licensee a notice in writing of not less than one year requiring the licensee to sell the undertaking to it at the expiry of the relevant period referred to in this sub-section." 6. It may be noticed that at least two years period of notice is out down to at least one year's period of notice. The notice should now expressly state that the licensee is required to sell the undertaking. 7. The U. P. State Electricity Board the first respondent, served a notice under Section 6 (1) upon the Company. The notice is dated September 23, 1966. The relevant portion of the notice reads:- "Notice under Section 6 of the Indian Electricity Act, 1910. In pursuance of the provisions of sub-Sec. (1) of Section 6 of the Indian Electricity Act, 1910, the U. P. State Electricity Board have exercised the option of purchasing yOur Electricity undertaking On the expiry of the period of twenty-eight years and six months of four Licence. Accordingly, a notice is hereby given to you to sell and deliver the undertaking to the U. P. State Electricity Board on the - date the period of twenty-eight years six months, from the date of Notification of the Licence expires," (emphasis ours) . 8. When the Company received this notice, it instituted a suit in the court of the Civil Judge, Lucknow on December 5, 1957. The suit was instituted long be-fore the expiry of the period of the licence. It impleaded the U. P. State Electricity Board and the Government of Uttar Pradesh as defendants-to the suit. 8. When the Company received this notice, it instituted a suit in the court of the Civil Judge, Lucknow on December 5, 1957. The suit was instituted long be-fore the expiry of the period of the licence. It impleaded the U. P. State Electricity Board and the Government of Uttar Pradesh as defendants-to the suit. It wanted the court to issue a permanent injunction to the defendants restraining them from dispossessing the Company from the undertaking or otherwise interfering with the working of the undertaking. It was alleged in the plaint inter alia, that the notice dated September 23, 1966 was invalid. The defendants contested the suit and filed their written statements stating that the notice was valid. 9. The Civil Judge held that the notice was valid. So he dismissed the suit with costs. The Company then filed the present appeal against the decree of the Civil Judge. 10. Counsel for the Company says that the amended Section 6 is not retrospective and that the old Section 7 will apply to this case. As the old Section 7 applies, the notice, obviously being of less than two years, is invalid. He points out that there is material difference between the provisions of the old Section 7 and the amended Section 6. While under Section 7 sale was completed on payment of compensation, under the amended Section 6 the Company is to deliver possession of the undertaking before receiving compensation. 11. There is no substance in the argument. Section 6 (1). (a) is expressly .made applicable to the case where a licence has been issued before the commencement of the Indian Electricity 1959. 12. In the present case the licence was issued before the commencement of that Act. So in spite of differences between the old Sec: 7 and the present Section 6 of the State Electricity Board may ask the Company to sell the undertaking under Section 6 (1) (a) . 13. We are referred to Clause 12 (iv) of the licence in support of the submission that the old Section 7 will apply. Clause 12 . (iv) of the licence states that the provisions of Section 7 of the Electricity Act shall, wherever necessary, be read as expressly added to or varied to the extent set out in sub-Clauses (i) , (ii) and (iii) of this clause. Clause 12 . (iv) of the licence states that the provisions of Section 7 of the Electricity Act shall, wherever necessary, be read as expressly added to or varied to the extent set out in sub-Clauses (i) , (ii) and (iii) of this clause. It is said that Clause 12 (iv) preserves intact Section 7 so far as the Company is concerned. We do not agree. Clause 12 (iv) cannot over-ride Section 6 (1) . Again, the reference to Section 7 in Clause 12 (iv) should now be read as a reference to Section 6 (1) in accordance with Section 8 of the Indian General Clauses Act. The licence is an instrument. So Section 6 shall -' be read in place of Section 7 in Clause 12 (iv) . 14. Reliance is placed on The Gujarat Electricity Board v. Shantilal, A.I.R. 1969 SC 239. It does not help the Company because in that case the notice was given under Section 7 of the old Act before the commencement of the Indian Electricity (Amendment) Act, 1959. 15. It is then said that even if Section 6 applies, the notice is not in conformity even with this section. It is pointed out that while the licence expires on April 6, 1968, the notice in effect asked the Company to sell the undertaking on April 14, 1968. That is not permissible under Section 6 (1) . 16. This argument is built on the language of the second paragraph of the notice. We have already quoted the notice. The second paragraph uses the word 'Notification'. It is said that the word `Notification' means publication or the act of notifying. For this meaning we are referred to Corpus Juris Secondum, Vol. 66 page 677. The licence was published in the U. P. Gazette, dated October 14, 1939. So according to the second paragraph of the notice the Company is required to sell the undertaking on the date the period of twenty-eight years and six months from the date of the publication of the licence in the Gazette expires. In other words, the undertaking is to be sold on April 14, 1968 which is really seven days beyond the expiry of the licence. We find it difficult to accept this argument as well. 17. We have carefully examined the entire text of the notice. In other words, the undertaking is to be sold on April 14, 1968 which is really seven days beyond the expiry of the licence. We find it difficult to accept this argument as well. 17. We have carefully examined the entire text of the notice. It appears to 1.1j that in view of the peculiar context and circumstances the word `Notification' cannot be interpreted as meaning publication or the act of notifying. 18. It may be remarked first that the notice states that it is issued under Section 6 Then, in the first paragraph it states clearly that the U. P. State Electricity Board have exercised the option of purchasing the undertaking 'on the expiry of the period of twenty-eight years and six months of the licence'. In other words, the first paragraph is clear that the Electricity Board have exercised the option of purchasing the undertaking on the expiry of the relevant period. By reading this paragraph the Company to whom the notice is given, will clearly understand that the Electricity Board wants to purchase the undertaking on the proper date. There is no ambiguity here. 19. We have to construe the word 'Notification' occurring in the second para-graph of the notice in this context. So we are clear that the word `Notification' does not mean publication or the act of notifying. We cannot believe that the draftsman of the notice, while mentioning the correct time for sale in the first paragraph of the notice, made a slip in the second paragraph of the notice. 20. It is important to notice rules 19 and 20 of the Indian Electricity Rules, 1956 in this connection. Rule 19 provides that "the State Government shall publish the licence within two months by a notification in the official gazette together with a statement that it has been granted." Rule 20 provides that "the date of a notification" under Rule 19 shall be deemed to be the date of commencement. of the licence. It is important to notice the indefinite article `a' before the word 'notification' in Rules 19 and 20. If the word `notification' in Rules 19 and 20 was intended to mean publication or the act of notifying, it would not have been qualified by the indefinite article. of the licence. It is important to notice the indefinite article `a' before the word 'notification' in Rules 19 and 20. If the word `notification' in Rules 19 and 20 was intended to mean publication or the act of notifying, it would not have been qualified by the indefinite article. It appears to us that the indefinite article suggests that the word 'notification' is used in the sense of a statutory instrument, Naturally the instrument will bear some date. It is that date which is material for the purpose of determining the date of the commencement of the licence. In the present case the licence is issued through the medium of a notification. We have already quoted the notification number. The notification bears the date of October 7, 1939. Under Rule 20 the licence would be deemed to have commenced from October 7, 1939. It appears to us that the Company understood the word `notification' in this sense before the dispute had arisen. It may be recalled that Clause 12 (1) originally stated that the licence was to come to an end on the expiration of 25 years from the date of notification of the licence. This period was amended in 1964. After the amendment the period mentioned is 'twenty-eight years and six months computed from October 7, 1939. It is possible to construe the word 'notification' in the unamended Clause 12 (1) as meaning publication. But it seems to us that the Government as well as the Company understood at the time of the amendments of Clause 12 (1) that the date of the notification as well as the date of the commencement of the licence was October 7, 1939. Both of them, therefore, agreed that the amended period of the licence should be counted from October 7, 1939. 21. Again, it may be observed that the word 'notification' is written with the capital 'N' in the second paragraph of the notice. The word 'licence' is also written with the capital 'L' after the word Notification'. The capitals, we think, rule out the meaning of publication or the act of notifying. The capitals suggest that the draftsman has used the word 'Notification' in the sense of an instrument or a deed. The words 'Notification of Licence' will thus mean 'the instrument or the deed of licence'. The capitals, we think, rule out the meaning of publication or the act of notifying. The capitals suggest that the draftsman has used the word 'Notification' in the sense of an instrument or a deed. The words 'Notification of Licence' will thus mean 'the instrument or the deed of licence'. In this connection it is pertinent to refer to the preamble of the notification issued in 1964 for amending the duration in Cl. 12 (1) . The preamble oil this notification states : "Whereas, in the opinion of the State Government the public interest permits that the terms and conditions of the Barabanki Electric Licence, 1939 published under Notification No. 3404-EL. 29-9-39 dated October 7, as amended from time to time, be amended." 22. Here again, the word 'notification' is written with capital 'N', It cannot here mean publication or the act of notifying. The Company understood in 1964 that the word 'notification' as used in the notification of 1964 did not mean publication or the act of notifying. It was aware then that it was used in the sense of an instrument. 23. Having regard to all these circumstances, it appears to us that the word 'Notification' in the second paragraph of the notice is used in the sense of an instrument or a deed of licence. Interpreting the word 'Notification' in that way, we have come to the conclusion that the second paragraph of the notice requires the Company to sell the undertaking on the proper date. 24. Clause 2 (vii) of the licence also uses the word 'notification' in the sense suggested by us. According to it the expression 'the commencement of this licence' shall mean the date of the notification by the Government of the United Provinces in the local official Gazette by which the license is granted. In other words, the license shall be deemed to commence on the date which is mentioned in the notification and not on the date on which the notification is published in the Gazette. So the license shall be deemed to have commenced on October 7, 1939. In Cl. 2(vii) the word 'notification' cannot be interpreted to mean' publication of the act of notifying. 25. In Gujarat Electricity Board v. Girdharlal Motilal, A.I.R. 1969 SC 267, the notice issued under Section 6 was found to be invalid. So the license shall be deemed to have commenced on October 7, 1939. In Cl. 2(vii) the word 'notification' cannot be interpreted to mean' publication of the act of notifying. 25. In Gujarat Electricity Board v. Girdharlal Motilal, A.I.R. 1969 SC 267, the notice issued under Section 6 was found to be invalid. The Supreme Court has laid in that case that the notice should be construed strictly, Counsel for the Company accordingly asked us to construe the present notice strictly. In that case the notice stated that the option to purchase the under-taking has been exercised. It did not state that the Company was required to sell the undertaking. The argument on behalf of the appellant was that the option to purchase should be construed as asking the Company to sell the under-taking. The Supreme Court declined to do that. It appears to us that the words' option to purchase' were not susceptible of the suggested construction on behalf of the Government. We have shown that the word 'notification' in the notice before us cannot be construed to mean 'publication or the act of notifying'. In the context and in the circumstances of the case, it should be construed in the sense of an instrument or a deed. According to Webstor's Dictionary the word 'notification' means' the act of giving notice; written or printed matter that gives notice.' The word 'notification' thus bears two meanings. Which meaning we should give to it in the notice will depend on its context 'and other circumstances of the cave. We have already shown that the context and other circumstances clearly indicate Mat it should be held to be used in the sense of an instrument or deed. This sense is implied in the second meaning given by Webster's Dictionary. Counsel relied on U. P. State Electricity Board v. Seth Ram Gopal, 1965 ALJ 187. In that case the word 'notification' in Clause 12 (1) of the licence was construed to mean publication of the licence in the Gazette. The facts of the case are different from the facts of this case. Learned Judges who decided that case seem to have confined their observation to the facts of the case. In that case the word 'notification' in Clause 12 (1) of the licence was construed to mean publication of the licence in the Gazette. The facts of the case are different from the facts of this case. Learned Judges who decided that case seem to have confined their observation to the facts of the case. At page 191 they say : "The date of notification here refers to the date of the notification in the official Gazette which, in the present case, is January 7, 1939" (emphasis ours) . So the decision is not helpful in the present case. 26. Nagpur Electric Light and Power Company Limited v. The Maharashtra State Electricity Board, (1967) 70 BLR 177 is also distinguishable from the present case. Clause 4 of the licence in that case provides clearly that the licence shall come into force on the day when the notification confirming it is published in the Gazette and that date shall be deemed to be the date of the commencement of the licence. 27. The last argument is that Section 6 violates Articles 14 and 19 of the Constitution. But when asked how, counsel did not develop the argument. It has not been shown to us how Section 6 violates Articles 14 and 19 of the Constitution. The argument cannot accordingly succeed. 28. The appeal, fails and is dismissed with costs.