M/S MALERKOTLA POWER SUPPLY CO., MALERKOTLA, THROUGH CHAMAN LAL GUPTA ITS PROPORIETOR Vs. PUNJAB STATE ELECTRICITY BOARD, PATIALA, DISTRICT PATIALA, THROUGH ITS CHAIRMAN

JUDGEMENT

(1.) THE writ petition seeks for a direction by issue of a mandamus to pay the petitioner the purchase price of the undertaking of the petitioner -Power Supply Company that was compulsorily acquired in the year 1977. The acquisition was made on the expiry of period of the licence to the Power Supply Company on 21.02.1977 and as per Section 7A of the Indian Electricity Act of 1910 then in force, the purchase price was required to be determined in accordance with the provisions of Section 7A(4) and paid at the time of taking over of the undertaking. In case the payment of the purchase price was deferred, the payment was required to be made along with interest at the Reserve Bank of India's rate ruling at the time of delivery of the undertaking plus 1%. This obligation on the part of the State was even an admitted fact at the time when the initial notice was issued to the Secretary, Punjab State Electricity Board on 29.01.1976. Subsequently by a communication dated 21.02.1977, the Electricity Board informed the petitioner that the purchase price had been tentatively worked out to Rs. 30 lacs inclusive of 20% solatium on account of compulsory purchase (comprising of assessed value of materials at Rs. 25,10,000/ -and adding 20% solatium, the total amount was Rs. 30,10,000/ -), but there had been debits to the tune of Rs. 30,90,707.98 against the petitioner and pending finalization of the amount, the Electricity Board was making a payment of Rs. 100/ -as token amount for acquisition of assets. The debit which was imposed on the petitioner was objected to by the petitioner and it should have been possible to refer the difference, in the manner contemplated under Section 7A(1) to arbitration. There was already however an agreement of arbitration between the parties that spelt a dispute with reference to additional tariff which was claimed by the State Board against the licensee for the period from 01.04.1966 to 15.10.1973. The subject of arbitration was expanded subsequently by an order of Court when it was directed that the Arbitrator shall consider all the pending claims by both the parties one against the other. An award came to be passed on 16.06.1986. As per the Award, an amount of Rs. 5,63,044/ -alone was payable by the petitioner to respondent and consequently, that alone would have been the subject of adjustment against the assessed value of assets and solatium payable to the petitioner. The award which had been made by the Arbitrator on 16.06.1986 was made the Rule of Court after hearing the objections from the Electricity Board. The award that became final through the decree passed by the Court on 12.11.1987 had become final and no action for setting aside the award had been made by the respondent. The petitioner made a demand on the Secretary, Electricity Board soon after the arbitral award and before it was made a decree of Court through a notice dated 15.09.1986 but the demand was not satisfied, it was only thereafter the writ petition came to be filed.

(2.) CERTAIN proceedings after the filing of the writ petition would require to be recalled about how there had been some attempts to compromise the matter between parties de hors the arbitration award brought before the Court. The fresh attempts were in the context of the Electricity Board's attempt to escalate the alleged outstanding due and payable by the petitioner. As far as the petitioner was concerned, the dispute, if at all, was only in respect of the amounts which were said to be recoverable from the petitioner and it did not have any objection to the tentative valuation of the assets and the solatium that had been already calculated and informed at the time of take over. The moment the Arbitrator passed an award determining the amounts recoverable from the petitioner, the respondent was bound to act on the same and make a balance of payment to the petitioner. However, the issue took a different turn only because at every time when the demand was made, the Electricity Board was making fresh calculations and escalating its own assessment of what was recoverable from the petitioner. I find this to be rather a strange course of events, for, once all mutual claims had been referred to arbitration, there was no way by which the Electricity Board could make fresh assessments and escalate its demands. In a communication dated 04.07.1988 by the Executive Engineer to the Superintending Engineer, it is specifically mentioned that the Electricity Board had decided not to challenge the award on 12.11.1987. The Executive Engineer has worked out calculations again and has observed that even apart from the amount which was determined by the Arbitrator, additional amounts were also liable to be paid by the petitioner totalling a sum of Rs. 12,44,134/ -. The Executive Engineer has suggested that the said amount could be deducted and after a proper assessment of the value of the assets, the amount that would still became payable would be Rs. 17,14,513/ -that would include 10% interest for 11 1/2 years from February, 1977 to August 1988 and if compound interest were to be calculated, it would be worked out to be Rs. 23,88,973/ -. Even apart from the letter of the Executive Engineer, I find the Superintending Engineer of the Sangrur circle had also informed the Chief Engineer, Patiala that after recasting evaluation of the assets, the amount as suggested in the Executive Engineer's letter must be fair so that further litigation is avoided. With intra communication from the respective higher officials of the Electricity Board that clearly admitted of liability, the respondents were only dragging their feet that has resulted in this writ petition.

(3.) I had referred to the issue that during the pendency of the proceedings itself, a compromise had been attempted. As a part of the effort, it is found from the records that the matter had been entrusted to a retired Judge of this Court and even his remuneration was fixed by orders of this Court on 20.02.1992. The order reads thus: