AMALGAMATED ELECTRICITY CO LTD Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) THIS is an application by the Amalgamated Electricity Co Ltd. Ajmer Branch against the State of Rajasthan and the Secretary to Government of Rajasthan, Public Works Department under Art. 226 of the Constitution for a writ of certiorari, prohibition, mandamus and other order or direction that this Court may be pleased to pass in connection with the notice given by the President of India to the applicant by which it was conveyed to the applicant that the President was exercising the option to purchase the undertaking run by the applicant at Ajmer.

(2.) BRIEFLY the facts which are relevant for present purposes are these. The applicant is a limited liability company and was given a licence in 1928 for supplying electricity to the municipal town of Ajmer. The area of supply in the licence was mentioned as the whole area within the municipal limits of Ajmer and such extensions beyond these limits as might be permitted by the Chief Commissioner of Ajmer Merwara from time to time. This licence was issue under sec. 3 of the Indian Electricity Act (No. X of i910) and the applicant has since been supplying electric energy to the municipal area of Ajmer. Besides this, it appears that the area of supply has been extended by notification under sec. 27 of the Indian Electricity Act on various dates in the last thirty years. At present the applicant is admittedly supplying electric energy to the municipal area of Ajmer as well as to the Municipal of Pushkar and to certain areas within the jurisdiction of the District Board of Ajmer and outside the municipal limits of Ajmer Municipality. When the thirty years period of the licence was still to run for a little more two years, a notice was issued by the President of India to the applicant under sub-sec. (2) to sec. 7 of the Indian Electricity Act read with clause 13 of Ajmer Electric Licence of the applicant intimating to it that the President desired to purchase the undertaking. This notice was dated the 5th of Jan. 1956 and the applicant was told that the President would exercise his option on the midnight between the 11th and 19th of January, 1958 on which date the thirty years period of the licence expired. The applicant made representations to the President against his decision to exercise the option of purchasing the undertaking. He was finally informed by letter dated the 10th of September 1957 that the decision had already been taken and would not be revoked. A draft of an agreement had also been forwarded to it, but it had not taken any action on it. It was finally informed that the Government was willing to pay the fair market price of the under taking plus 20% thereof as specified in sec. 7 of the Indian Electricity Act and as contained in the licence. It was further informed that no further unnecessary correspondence in the matter should be made unless it agreed to execute the agreement. Thereafter the present application was made to this Court and the main contentions of the applicant are these: - (1) That the notice of the option to purchase issued by the President in 1956 is invalid and of no effect because the President had not the power to issue the notice and that it should have been issued by the then State Government of Ajmer. (2) That the President had no power under sec. 7 (2) (a) and (b) of the Indian Electricity Act, even if he was the person who had the right to issue notice to exercise the option to purchase the undertaking. (3) That the licence was not heard before the President decided to exercise the option to purchase the undertaking and that a decision as to the option was a judicial or quasi-judicial decision and natural justice required that the applicant should have been heard before the President decided to exercise the option. (4) That the action of the President was mala fides, though the applicant did not really give any facts on which this is based. (5) The applicant also took up cudgels on behalf of the Chief Commissioner and the Council of Ministers of the State of Ajmer and also the Municipality of Ajmer as if these authorities were incapable of defending their own interests and it was alleged that these authorities had been denied the exercise of their constitutional and legal right of exercising the option.