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PETITIONER: COCHIN STATE POWER AND LIGHT CORPORATION LTD.

       Vs.

RESPONDENT: STATE OF KERALA

DATE OF JUDGMENT: 25/02/1965

BENCH: BACHAWAT, R.S. BENCH: BACHAWAT, R.S. SUBBARAO, K. SHAH, J.C.

CITATION:  1965 AIR 1688            1965 SCR  (3) 187

ACT: India Electricity Act, 1910, s. 6(1)(2) and (4)--Scope of.

HEADNOTE: The  appellant held a licence for the supply  of  electrical energy in Kerala which was granted for a period of 25 years, and  was subject to continuation for ten-year terms  in  the absence  of  a  notice  by  the  local  authority  or  State Government  of an election to purchase the undertaking.  The first  25-year  term of the licence expired on  December  2, 1960, and prior to that, on October 24 and again on  October 29,  1959,  the State Electricity Board gave notice  to  the appellant under s.6(1) of the Indian Electricity Act.  1910, to  purchase the under taking on the expiry of the  licence. On November 20, 1959,the State Government also served notice on   the   appellant  of  its  election  to   purchase   the undertaking on December 2, 1960.  In  November 1960, the appellant filed a  writ petition  in the   High  Court  seeking  orders  restraining  the   State Electricity  Board and the respondent State Government  from taking any action pursuant to the notices given by them.  In the   course  of  the  hearing  the   petition   the   State Electricity  Board  waived and abandoned all its  rights  of purchase  of the Undertaking. The writ  petition  thereafter dismissed  and  it was held that the State   Government  was entitled  to  take  further steps  under  its  notice  dated November  20,  1959. An appeal against this  decision  to  a Division Bench of the High Court was dismissed. In   the  appeal  to  the  Supreme  Court,   the   appellant contended,inter  alia,  that  the  State  Electricity  Board having  duly elected under 6(1) to purchase the  undertaking on the expiry. of the licence, the State Government acquired no option of purchase under s. 6(2) the 1910 Act. HELD: Any option of purchasing the undertaking on the expiry of the period of 25 years specified in the licence under  s. 6(1) vested in the State Electricity Board, and as the Board duly  elected  to  purchase the undertaking  by  the  notice served  on the appellants, the State Government acquired  no right  or option of  purchasing the undertaking under s.  6. [193 G-H] As  s.  6 came into force less than eighteen  months  before

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December  2, 1960, it was impossible for the Board  to  have given notice to  the State Government as required by s. 6(4) of its intention to exercise the option. On the principle of lex non cogit ad  impossibil must therefore’ be construed as not         being         applicable         in          the that  the  Board could not be deemed  circumstances  of  the case,  so  elected not to purchase the   undertaking   under s.  6(4).[193 E-F]

JUDGMENT: CIVIL,  APPELLATE  JURISDICTION: Civil Appeal  No.  897   of 1963. Appeal from the judgment and order dated October 4, 1962  of the  Kerala High Court, Ernakulam, in Writ Appeal No. 17  of 1962. 188    A.V.  Viswanatha  Sastri,  Arun B.  Saharaya  and  Sardar Bahadur, for the appellant.     V.P.  Gopalan  Nambiar, Advocate-General for  the  State Kerala and V.A. Seyid Muhammad, for the respondent. The Judgment of the Court was delivered by     Bachswat,  J.  The  short question  in  this  appeal  is whether  the  proposed   acquisition   of  the    electrical supply  undertaking of the appellant by the State of  Kerala in pursuance of the notice Ex. G, dated November 20, 1959 is authorised by s. 6 of the Indian Electricity Act, 1910.     The appellant is the holder of a license for the  supply of  electrical  energy  in Ernakulam  and  other  places  in Cochin.  The license was originally granted to the  managing agents  of  the   appellant  under  the  Cochin  Electricity Regulation  III  of  1902  then  in  force  in  Cochin   and subsequently  assigned to the appellant with the  permission of the Cochin Government. On the merger of Travancore-Cochin with  the Union of India, the Indian Electricity  Act,  1910 was  made  applicable by the Part-B States Laws  Act,   1951 (Act  III  of 1951) to the Travancore-Cochin area,  and  the Cochin   Electricity   Regulation   stood   repealed.    The Electricity   (Supply) Act, 1948 (Act 54 of 1948)  was  also made applicable to the Travancore-Cochin area by the  Part-B States  Laws  Act,  1951.  On  March  31,  1957  the  Kerala Electricity Board was constituted, and by s.71 of Act 54  of 1948,  any right and option to purchase the  undertaking  of the  licensee  under the Indian Electricity  Act,  1910  was transferred  to and vested in the Board. Now, the  right  or option  to  purchase  the undertaking of  a  licensee  under s.7(1) of the Indian Electricity Act, 1910 then in force was exercisable "on the expiration of such period, not exceeding fifty  years,   and  of every such  subsequent  period,  not exceeding twenty years as shall be specified in this  behalf in the license." Sub-section (4) of s.7 provided:                     "Not  less  than two  years’  notice  in               writing of any election to purchase under this               section  shall be served upon the licensee  by               the  local authority or the State  Government,               as the case may be."               Clause  15(a)  of  the  license  held  by  the               appellant provides:                     "The option of purchase given by Section               7,  sub-section  (i) of the  Regulation  shall               first  be exercisable on the expiration of  25               years  from the commencement of  this  license               and  on the  expiration  of  every  subsequent               period of ten years during the continuance  of

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             this license." Section   7(1)  of  the  Indian  Electricity    Act,    1910 corresponds to s. 7(i) of the Regulation, that is to say, of the   Cochin  Electricity.  Regulation.  The  date  of   the commencement of the license is December 3, 1935. The  period of 25 years mentioned in el. 15(a) of the license expired on December 2, 1930. The last date for giving the two years notice of the election to purchase  on, the  try of’ December 2, 1960 required under s. 7(4) of  the Indian e electricity Act, 1910 expired on December 2.  1958. On February 11, 1959, the State Electricity Board served  on the  appellant a notice, Ex. B, of its election to  purchase the undertaking of, the appellant on the expiry of  December 2,   1960, but this notice was not being in accordance  with s. 7,(4) was of no legal effect. By  the  Indian Electricity (Amendment) Act,  1959  (Act  32 1959),  s.6 now in force was substituted for the old s.7  of the Indian Electricity Act, 1910, with effect from September 5,  1959. Section 6 of the Indian Electricity Act; 1910  now in force reads: "6.  (1) Where a license has been granted to any person  not being  a  local  authority,  the  State  Electricity   Board shall,--        (a)  in ’the case of a license  granted’  before  the commencement  of  the Indian  Electricity  (Amendment)  Act, 1959, on the expiration of each such period as is  specified in the license; and        (b) in the case of a. license granted on or after the commencement  of  the said Act, on the  expiration  of  such period  not  exceeding  twenty  years  and  of  every   such subsequent period, not exceeding ten  years, as  shall  be specified in this behalf in the license; have  the  option  of purchasing the  undertaking  and  such opt:on  shall  be exercised by the State  Electricity  Board serving  upon  the license 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.        (2)  Where  a State Electricity Board  has  not  been constituted,  or if constituted, does not elect to  purchase the  undertaking, the State Government shall have the   like option to be exercised in the like manner of purchasing  the undertaking.    (3)Where  neither  the State Electricity Board  nor   the Government elects to purchase the undertaking, any authority constituted  for an area within which the area of supply  is included  shall have the like option to be exercised in  the like manner of purchasing   the undertaking.  (4) If the State Electricity Board intends to  exercise the option of purchasing the  undertaking  under  this it  shall send an intimation in writing of such intention to the State Government at least eighteen months before the expiry of the relevant period referred to in subsection (1) and if no such intimation as aforesaid is receiv 190 ed by the State Government the State Electricity Board shall be deemed to have. elected not to purchase the undertaking. (5) If the State GoVernment intends to exercise the   option of purchasing the undertaking under this section. shall send an  intimation  in writing of such intention  to  the  local authority,  if any, referred to in sub-section (3) at  least fifteen  months  before the expiry of  the  relevant  period referred to in sub-section (1) and if no such intimation  as aforesaid  is  received by the local  authority.  the  State Government  shall be deemed to have elected not to  purchase

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the undertaking.       (6) Where a notice exercising the option of purchasing the undertaking has been served upon the licensee under this sect:on,  the licensee shall deliver the undertaking to  the State  Electricity Board, the State Government or the  local authority,  as  the case may be, on the  expiration  of  the relevant  period referred to in sub-section (1) pending  the determination and payment of the purchase price.       (7)  Where  an  undertaking is  purchased  under  this section,  the  purchaser  shall  pay  to  the  licensee  the purchase price determined in accordance with the  provisions of sub-section (4) of section 7A."     On October 24, 1959, the State Electricity Board  served upon  the  appellant  a notice Ex. D,  of  its  election  to purchase the undertaking on the expiry of December 2,  1960. On  October  29, 1959, the State Electricity  Board   served upon  the appellant another notice, Ex. E, of its  election. On November 20, 1959, the  State Government served upon  the appellant  a notice, Ex. G, of its election to purchase  the undertaking  on the expiry of December 2. 1960. On  November 14,  1960, the appellant filed a writ petition in  the  High Court  of  Kerala  impleading the State of  Kerala  and  the Kerala  State Electricity Board and asking for the issue  of appropriate  writs and orders restraining them from   taking any  action  pursuant to the notices. Exs. B,D,E and  G.  On December 20. 1961, a learned single Judge of the High  Court passed the following order :                     "In  view  of  the  representation  made               before me by both the learned Advocate-General               appearing for the State, the I st  respondent,               and Mr. Krishnaswami lIyengar, learned counsel               appearing  for  the Kerala  State  Electricity               Board.  the  second respondent. that  for  the               purpose  of  this writ petition.  the  notices               issued by the Kerala State Electricity  Board,               Exs.  B.  D and E can be ignored,  it  follows               that  neither the 1st respondent nor  the  2nd               respondent  has any jurisdiction or  power  to               take  any action on the basis Exs. B. D or  E.               In view of the fact that I am uphold-                          191               ing  the action of the State  Government,  who               had  issued the notice Ex. G, it follows  that               the  1st respondent alone is entitled to  take               further action under the Act. in pursuance  of               the notice, Ex. G, issued and sent along  with               the covering letter, Ex. F on 20-1 1-1959.  It               follows, subject to what is stated about  Exs.               B,  D and E, that the writ petition has to  be               dismissed.  There  will  be  no  order  as  to               costs."  The  effect of this order was that the  State   Electricity Board waived and abandoned all its rights of purchase of the undertaking under the notices, Exs. B, D and E, and  neither the Kerala State  Electricity Board nor the State of  Kerala had  any  jurisdiction or power to take any  action  on  the basis  of  those notices, and save as  aforesaid,  the  writ petition  was  dismissed,  and  it  was  held   that   State Government  was entitled to take further action  under   its notice, Ex. G. Aggrieved by this order, the appellant  filed an  peal  in  the Kerala High  Court  impleading  the  State Government   only  as  the  party  respondent.   The   State Electricity Board did not file any appeal from the order  of the  learned single Judge. By its judgment dated October  4, 1962,  a  Division  Bench of the High  Court  dismissed  the

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appeal. In paragraph 15 of its judgment, Bench observed:                 "In  its  petition the appellant  asked  for               reliefs   both   against the State  Government               and the  State  Electricity   Board.  However,               in the course of the hearing of the  petition,               the Board gave up its claims under Exts. B.  D               and    E,  and  only the claim  of  the  State               Government  under Ext.   G was canvassed.  The               petition  was, in  effect,  allowed:   against               the Board.  The Baord has not appealed and  is               not  a  party to the present appeal;  and  its               notices  may   therefore be ignored except  to               the  extent that they may   affect the  rights               of the State Government."   The   appellant  now  appeals  to  this  Court   under   a certificate granted by the High Court under Arts.  133(1)(a) and 133(1)(c) of the  Constitution. On  half of the appellant, Mr. Vishwanath  Sastry  contended that  (1)  as  the  two years’ notice  in  writing  of.  the election  to  purchase  the undertaking  on  the  expiry  of December,  2,  1960  was   not served on  the  appellant  as required by the old s. 7(4) of the   Indian Electricity Act. 1910.  the appellant acquired a vested right   to  hold  the license  until  the  expiry  of  a  further  period  of  ten years.that  is  to say, until December, 2,  1970.  and  this vested  right  was  not taken away either  expressly  or  by necessary  implication  by    the  new  s.6  of  the  Indian Electricity  Act, 1910 introduced by the amending Act 32  of 1958;  (2) the expression "on the expiration of   each  such period as is specified in the license" in the new  s.6(1)(a) means  a period which has not expired and on the  expiry  of which    the option may be legally exercised. and  since  in the  absence of   the two years’ notice required  under  the old s.7(4), the option of purchase on the expiry of December 2, 1960 could not be legally 192 exercised,  the  new  s.6(1) did not confer  any  option  of purchase  on  the expiry of December 2, 1960 and  the  first option  exercisable  under the new s.6(1) would  be  on  the expiry of December 2, 1970; (3) sub-sections (4) and (5)  of the new s.6 show that the period on the expiry of which  the option  under  sub-s(1)of s.6 is exercisable,  is  a  period which would expire at least 18 months after the coming  into force  of  the new s.6, that is to say, after  September  5, 1959,  and since the period expiring on December 2, 1960  is not such a period, the new s.6(1) did not confer any  option of  purchase on the expiry of December 2, 1960; and  (4)  in any  event, the State Electricity Board having duly  elected to  purchase  the undertaking on the expiry of  December  2, 1960,  the State Government acquired no option  of  purchase under sub-s(2) of s.7 of the Indian Electricity Act, 1910.     On behalf of the respondent. Mr. V.P. Gopalan   Nambiar, the  Advocate-General  of  Kerala, contended  (1)  that  the absence  of  two years’ notice under the old s.7(4)  of  the Indian  Electricity  Act,  1910  did  not  confer  upon  the appellant  a  vested  right to hold the  license  until  the expiry of December 2, 1970, and the immunity from compulsory purchase  under the old s.7 arising from the non-service  of the requisite two years’ notice could be, and, in fact,  was taken  away by the new s.6, which  required only one  year’s notice  of  intention  to  purchase  the  undertaking;   (2) assuming  that  the appellant acquired under the old  s.7  a vested  right to hold .the license until December  2,  1970, such  vested  right  was taken away by the  new  s.6,  which expressly   applies   to   licenses   granted   before   its

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commencement,  and  the  period  of 25  years  is  a  period specified  in  as  the license on the expiry  of  which  the option of purchase was legally exercisable; (3) sub-sections (4)  and  (5)  of the new s.6 did not  cut  down  the  plain meaning  of  sub-s(1) of the section and the option  on  the expiry  of the period of 25 years was vested’under  sub-s(1) of  s.6, though this period did not expire 18  months  after September  5. 1959; and (4) as the State  Electricity  Board did  not  send to the State Government  any   intimation  in ’writing  ’of’ its intention to exercise the option  on  the expiry  of December 2, 1960 as required by sub-s(4) of  s.6, the  Board  must be deemed to have elected not  to  exercise this option, and consequently by sub-S(2) of s.6. the  State Government is vested with the option We  think that the fourth  contention  of   Mr.   Viswanatha Sastry  is  sound,  and  should   be   accepted.   Assuming, without   deciding,  that  the  option  of  purchasing   the undertaking  on  the  expiry  of  the  period  of  25  years specified  in  the license was available under  sub-s(1)  of s.6, such option vested in the State Electricity Board,  and as  the Board duly elected to purchase the undertaking,  the State  Government acquired no right or option of  purchasing the undertaking under s.6. On this ground alone, the  appeal should be allowed, and in this view of the matter, we do not think  it  necessary  to express any opinion  on  the  other contentions urged 193 before  us.  As  far  as  the  State  Electricity  Board  is concerned,.  it  has  abandoned and  waived  its  option  of purchase on the expiry of 25 years.     Sub-section  (1)  of s.6 expressly vests  in  the  State Electricity  Board the option of purchase on the  expiry  of the relevant period specified in the license. But the  State Government   claims  that under sub-s(2) of s.6  it  is  now vested  with  the option. Now, under sub-s(2)  of  s.6,  the State Government would be vested with the option only "where a  State Electricity Board has not been constituted,  or  if constituted, does not elect to purchase the undertaking." It is  common  case that the State Electricity Board  was  duly constituted. But the State Government claims that the  State Electricity Board did not elect to purchase the undertaking. For  this  purpose,  the State Government  relies  upon  the deeming provisions of sub-s(4) of s.6, and contends that  as the  Board  did  not  send  to  the  State  Government   any intimation  in  writing  of its intention  to  exercise  the option  as  required by the sub-section, the Board  must  be deemed to have elected not to purchase the undertaking. Now, the  effect of sub-s(4) read with sub-s(2) of  s.6 is   that on  failure  of the Board to give the notice  prescribed  by sub-s(4),  the option vested in the Board under sub-s(1)  of s.6  was  liable  to be divested.  Sub-section  (4)  of  s.6 imposed  upon the Board the duty of giving after the  coming into  force of s.6 a notice in writing of its  intention  to exercise the option at least 18 months before the expiry  of the relevant period. Section 6 came into force on  September 5,  1959,  and the relevant period expired  on  December  3. 1960.  In  the circumstances, the giving  of  the  requisite notice of  18 months in respect of the option of purchase on the expiry of December 2, 1960, was impossible from the very commencement of s.6. The performance of this impossible duty must  be  excused  in accordance with  the  maxim,  lex  non cogitate  ad impossible  (the law does not compel the  doing of  impossibilities), and sub-s(4) of s.6 must be  construed as  not being applicable to a case where compliance with  it is  impossible.  We  must therefore, hold  that   the  State

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Electricity Board was not required to give the notice  under sub-s(4) of s.6 in respect of its option of purchase on  the expiry of 25 years. It must follow that the Board cannot  be deemed to have elected not to purchase the undertaking under sub-s(4)  of s.6. By the notice served upon  the  appellant, the  Board duly elected to purchase the undertaking  on  the expiry of 25 years. Consequently, the State Government never became vested with the option  of purchasing the undertaking under sub-s(2) of s.6. The State Government must, therefore, be  restrained from taking further action under its  notice, Ex. G, dated November 20, 1959.      In   the  result,  the  appeal  is  allowed,  and   the respondent  State  of Kerala is restrained from  taking  any action under the notice, Ex. G, dated November 20, 1959. The respondent  shall  pay to the appellant the  costs  in  this Court. We direct the parties to pay and bear their own costs in the Courts below.    Appeal allowed. 194