# MAHARASHTRA STATE ELECTRICITY BOARD AND THE STATE OF MAHARASHTRA v. NAGPUR ELECTRIC LIGHT AND POWER COMPANY LTD. &ANR

- **Citation:** [1972] 3 S.C.R. 19
- **Court:** Supreme Court of India
- **Decided:** 1972-01-01
- **Case number:** Civil Appeal Nos. 1429 & 1764 of 1968
- **Bench:** S. M. S!Kri, J. M. Shelat, I. D. Dua, H. R. Kkan:<:A, G. K. Mitter
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/maharashtra-state-electricity-board-and-the-state-of-maharashtra-v-nagpur-5599
- **Pages:** 10

## Headnote

Indian Electricity Act 1910, S. 4(3)-A11iendnie11t of tenns & co11di·
tions of Nagpur ,Electricity Licence-Validity of a1nend111e;nt
niadc in
1.966--Lega/ity of notice undet s. 6 of Act for purchase of undertaking
by Electricity Board.
On May 4, 1905 a J:ccnce was granted under s. -lll) of the Indian
Electricity Act, 1903 to Crompton & Co. Ltd. for 1 he supply of electricity
in the municipal area of Nagpur.
A notification gnint:ng the above
license was published in the Central Provinces Gazette on May 6. 1905.
The lic:cn'.!e provideCi that the right of the governtncnt to purchase the
undertaking &hall arise after 42 · years from the conimencen1ent of the
license and aft!!r every, subsequent period of 10 years.
Para 4 of thr
license provided that it '"'·oul<l come into force c.tnJ have effect on the
day \Vhen the notification confirming it was published in the Central Provinces Gazette and that <lay would for the purpose of Act, be deemed to
be the c'ommcnccment of the license. On January 1. 1911 the IncYan
Electricity Act, 1910 came into force.
On June 28, 1913 a notificatio:i
permitting the ·assignn1ent of the licence in favour of ·the Nagpur Electric
Light and Power Company Ltd, (respondent herein) was published in the
gazette.
On May 2. 1947 amendments in the -terms and conditions of
the licence were made under s. 4(3) of the Act of 1910 and were published in the gazette.
In the preambJe it was stated that these a1nendments were "in •he terms and conditions of the Nagpur Electric:ty licence
grante~. under the Public Works Dept!.
Notification No. 45 dated 4th
May 1905 .......... "
fa the various amendments made throughout
the reference 'was made to May 4. 1947 as being the date when various
changes were deemed to start or operate. In clause 3 paragraph ( o) (i)
was provided that "Option of purchase given by sub-section 1 of section 7
of the Act shall be exercisable on .the expiration of ten years or 4th May
1957 and the expiration of every subsequent period of ten years during
continuance of this
licence."
On September 4,
1948 the Electricity
Supply Act, 1948 came into force.
Section 71 of this Act provided that
the ri~t and options to purchase under the Indian Electricty Act. 1910
were deemed to have been transferred to the Provincial (now State) Electricity Board. The Indian Electricity Amendment Act. 1959 (32 of 1959)
amended Indian Electrictv Act. 1910. In the newly inserted
section
4A(l) t.he proviso thereto said that no alterations or amendments in the
license shall be made except with the consent of the lisensee unless such
consent was in the opinion of the State aovernment unreuo.ably with·
held.
In the amended Act section Ii provided for the purchase of th<"
licensee's undertaking by the State Electricitv Boa...t. but the old section 7
was allowed to continue.
On Se!>tember 15, 1965 notice w1s g;ven to
the resrondent under sub-section (I) and sub.-tion (61 of section 6
' of the Indian Electricity Act, 1910 whereby the respondent was required
20
SUPREME. COURT REPORTS
[1972] 3 S.C.R.
to sell its undertaking to the Board on the midnight of 3rd/4th May,
l 967 being the date of the expiry of the licence granted to it. Doubts
arose as to the interpretation of clause 3 paragraph (o) (i) of the licence
because of the use of the word 'or' between
words
10 years
and
"the 4th May. 1957" in the said clause. The State Government on April
l 9, 1966 published a notification whereby in the said clause between the
words "IO years" and "the 4th May, 1957" the \\-'Ord "on" was substituted, the effect of which was that the option to purchase became exercisable on the expiration of period of 10 years on the 4th MaY. 1957.
After this amendment another notice was given under sub-section ( 1)
and (6) of s. 6 of the Indian Electricity Act, .J910 on April 26, 1966.
The \VOrds of this notice were the same as that of the earlier notice but
it \\'as expressly given in supersession of the earlier notice.
The respondent filed a \\'fit petition

## Text

A
B
G
D
E
F
G
H
19
MAHARASHTRA STATE ELECTRICITY BOARD AND THE
STATE OF MAHARASHTRA
v.
NAGPUR ELECTRIC LIGHT AND POWER COMPANY LTD.
&ANR.
.
January 1, 1972
(S. M. S!KRI, C.J., J. M. SHELAT, I. D. DUA, H. R. KKAN:<:A
AND G. K. MITTER, JJ.)
Indian Electricity Act 1910, S. 4(3)-A11iendnie11t of tenns & co11di·
tions of Nagpur ,Electricity Licence-Validity of a1nend111e;nt
niadc in
1.966--Lega/ity of notice undet s. 6 of Act for purchase of undertaking
by Electricity Board.
On May 4, 1905 a J:ccnce was granted under s. -lll) of the Indian
Electricity Act, 1903 to Crompton & Co. Ltd. for 1 he supply of electricity
in the municipal area of Nagpur.
A notification gnint:ng the above
license was published in the Central Provinces Gazette on May 6. 1905.
The lic:cn'.!e provideCi that the right of the governtncnt to purchase the
undertaking &hall arise after 42 · years from the conimencen1ent of the
license and aft!!r every, subsequent period of 10 years.
Para 4 of thr
license provided that it '"'·oul<l come into force c.tnJ have effect on the
day \Vhen the notification confirming it was published in the Central Provinces Gazette and that <lay would for the purpose of Act, be deemed to
be the c'ommcnccment of the license. On January 1. 1911 the IncYan
Electricity Act, 1910 came into force.
On June 28, 1913 a notificatio:i
permitting the ·assignn1ent of the licence in favour of ·the Nagpur Electric
Light and Power Company Ltd, (respondent herein) was published in the
gazette.
On May 2. 1947 amendments in the -terms and conditions of
the licence were made under s. 4(3) of the Act of 1910 and were published in the gazette.
In the preambJe it was stated that these a1nendments were "in •he terms and conditions of the Nagpur Electric:ty licence
grante~. under the Public Works Dept!.
Notification No. 45 dated 4th
May 1905 .......... "
fa the various amendments made throughout
the reference 'was made to May 4. 1947 as being the date when various
changes were deemed to start or operate. In clause 3 paragraph ( o) (i)
was provided that "Option of purchase given by sub-section 1 of section 7
of the Act shall be exercisable on .the expiration of ten years or 4th May
1957 and the expiration of every subsequent period of ten years during
continuance of this
licence."
On September 4,
1948 the Electricity
Supply Act, 1948 came into force.
Section 71 of this Act provided that
the ri~t and options to purchase under the Indian Electricty Act. 1910
were deemed to have been transferred to the Provincial (now State) Electricity Board. The Indian Electricity Amendment Act. 1959 (32 of 1959)
amended Indian Electrictv Act. 1910. In the newly inserted
section
4A(l) t.he proviso thereto said that no alterations or amendments in the
license shall be made except with the consent of the lisensee unless such
consent was in the opinion of the State aovernment unreuo.ably with·
held.
In the amended Act section Ii provided for the purchase of th<"
licensee's undertaking by the State Electricitv Boa...t. but the old section 7
was allowed to continue.
On Se!>tember 15, 1965 notice w1s g;ven to
the resrondent under sub-section (I) and sub.-tion (61 of section 6
' of the Indian Electricity Act, 1910 whereby the respondent was required
20
SUPREME. COURT REPORTS
[1972] 3 S.C.R.
to sell its undertaking to the Board on the midnight of 3rd/4th May,
l 967 being the date of the expiry of the licence granted to it. Doubts
arose as to the interpretation of clause 3 paragraph (o) (i) of the licence
because of the use of the word 'or' between
words
10 years
and
"the 4th May. 1957" in the said clause. The State Government on April
l 9, 1966 published a notification whereby in the said clause between the
words "IO years" and "the 4th May, 1957" the \\-'Ord "on" was substituted, the effect of which was that the option to purchase became exercisable on the expiration of period of 10 years on the 4th MaY. 1957.
After this amendment another notice was given under sub-section ( 1)
and (6) of s. 6 of the Indian Electricity Act, .J910 on April 26, 1966.
The \VOrds of this notice were the same as that of the earlier notice but
it \\'as expressly given in supersession of the earlier notice.
The respondent filed a \\'fit petition under article 226 of the Constitution challenging the aforesaid notice dated April 26, 1966. The High Court held that
since the operation of Jicense con1menced on May, 6, 1905 it could not
terminate on May 4, 1957 and therefore the amendment of 1966 was
invalid.
Jn appeal to this Court it was comn1on ground that the licensee
had never replied to the letter of the State Electricity Board asking for
its consent for the amendment of the licence in 1966 in tern1s of section
4A(l) of the Electricity Act.
HELD : (i) In the circumstances of the case there could be no
doubt that the State Government was entitled to hold the opinion that
the consent of the licensee for the purchase of undertaking had been
unreasonably withheld. r27 El
(ii) Two inte·rprctzitions were possible of clause 3 paragraph (o) (i)
of the license. as it existed before the amendme-nt dated April 19, 1966.
One was that !he \\'Ord 'or' had been \\'rongly use<l by some printing
mistake and the true word was "on". The other interpretation was that
two dates had been provided for the exercise of the option; one, the expirat:on of ten years from May 6, 1947 the other being May 4, 1957.
Thus there was genuine doubts about the real date
and
if the
State
Government sought to clarify the point it cannot be said that it made
an. unreasonable demand from the licensee.
It was not a case where
governn1ent was providing- for the option to purchase which was not
originally intended to be given. [26 F-HJ
(iii) The High Court was wrong in holding that May 6 was the relevant date becatise the notification relating to the original license was published on M'Y 6, 1905. When t~e license was amended in 1947 with the
consent of the 1icensee it proceeded on the basis that the 42 vears period
expired on Mav 3, 1947 because throughout the
cruci<~l effective date
in the amendments is May 4, 1947.
Para 4 of the or'ginal license
thus ceased to have effect for the purpose of construing the 1icense as
amended in 1947 and subsequently.
(iv) If clause (3) paragraph (o) (i) is interprete~. in the light of the
rest of the amendments made in the license in 1947, it is quite clear
that the previous period was deemed to have expired on Mav 3, 1947
and the fresh period started on Mav 4, 1947 and the $ubsequent periods
of 10 vears ended on Mav 3. 1957 and Mav 3. 1967. lt is impo'5ible
to read the license as amended in 1947 in any other wav than that it
was agreed that the ueriod of 10 vears in the license would start from
Mav 4. 1947. 'Tlie details of distribution svstem, the valuatiofl of assPts
as on Mav 4, 1947 and other clauses all point to this conclusion.
The
license riehtlv talked of Sec. 7 of the Electricity Act because the license
stHl provided for the start of period of 10 years from May 194 7 and
A
B
c
n
E
F
( . .
H
MAHARASHTRA ELECT. BOARD v. NAGPUR ELECT. CO.
~T
(Sikri, C.J.)
A
this could only be proyided for while the old sec. 7 stood. The notice
dated April 26, 1966 was thus in accordanee with terms of the license
and the Jaw.
The impugned notice did not suffer from any infirmity.
The appeal n.ust accordingly be allowed. [280-HJ
8
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1429 &
1764 of 1968.
Appeal from the jud~ment and order dated the 26th April,
1967 of the Bombay High Court, Nagpur Bench in Special Civil
Application No. 125 of 1967.
Niren De, Attorney-General for India, A. G. Ratnaparkhi,
C. K. Ratnaparkhi and Rajiv Shah, for the appe!lant (in C.A. No.
C
1429 of 1968) and Responde11t No. 3 (in C.A. No. 1764 of B68.
0
M. C. Setalvad and/. N. Shroff, for respondents Nos. 1 and 2
(in C.A. No. 1429 of 1968).
B. D. Sharma, for respondent No. 3 (in C.A. No. 1429 of
1968).
V. S. Desai, P. K. Chatterjee and B. D. Sharma, for the appellant (in C.A. No. 1764 of 1968).
S. /. Sorabjee and /. N. Shroff, for respondents Nos. 1 and 2
(in C.A. No. 1764 of 1968).
E
S. I. Sorabjee, Ashok H. Desai and R. P. Kapur, for intervenar
F
No. 1 (in both the Appeals).
R. N. Banerjee and R. P. Kapur, for Intervener No. 2 (in both
the Appeals).
The Judgment of the Court was delivered by
Slkri, C. J.
These two appeals by certificate are d;rected
against the judgment of the High Court of Bombay ( Abhyankar
and Paranjpe, JJ). By this judgment the High Court came to
the conclusion that the notice dated April 26, 1966, issued by the
Maharashtra State Electricity Board under the provisions of s. 6 ·
G
of the Indian Electricity Act, 1910, was invalid in law and was
unenforceable having failed to satisfy the essential conditions of
the notice.
The High Court accordingly allowed the petition under
art. 226 of the Constitution and quashed the said notice.
The relevant facts for determining the points at issue before
us are as follows : On May 4, 1905, a licence was granted
H
under s. 4(1) of the Indian Electricity Act, 1903, to Crompton
& Co. Ltd., London, for the supply of electricity in the municipal
area of Nagpur.
A notification granting the above licence was
22
SUPREMF. COURT REPORTS
[1972] 3 S.C.R.
published in the Central Provinces Gazette on May 6, 1905. · On
A
January I, 1911, the Indian Electricity Act,
1910, came into
. force. On June 28, 1913 a notification permitting the assignment
of the licence in favour of the Nagpur Electric Light and Power
Company Ltd., respondent before us, was published in the gazette.
On May 2, 194 7, amendments in the terms and conditions of the
licence made in exercise of the powers conferred oy sub-s. (3) of
B
s. 4 of the Indian Electricity Act, 1910, were published. In the
preamable it was stated that these amendments were "in the terms
and conditions of the Nagpur Electricity Licence, granted under
the Public Works Department Notification No. 46, dated the 4th
May, 1905 .... " In the various ameindments made throughout,
reference was made to May 4, 1947, as being the date when various
C
changes were deemed to start or operate.
For instance, in clause 2
paragraph ( v) the expression "deposited map" was defined as
follows :
"2(v) the expression "deposited map" shall mean
the plans and statements showing
(a) the area of supply;
(b) details of distribution system laid and in use as
on 4th May 1947;
( c) additions or alterations. or both to existing distribution system as on 4th May 1947 .... "
A.1tain clause 2 paragraph (ix) defined the expression "Nett Book
V aloe" to. mean the written down value of the assets as on May
4, 1947. In clause 3 paragraph (b)(ii) it is provided that "nothD
E
ing in this licence shall be construed to prevent the Great Indian
Peninsula Railway, the Bengal Nagpur Railway or the Provincial F
Government or the Central Government from taking from the
Government a supply of electrical energy for its exclusive use
within the area of supply for new installations set up by them
after 4th May, 1947". Jin clause 3 paragraph (d) it was provided that "the licencee shall, within six months from the 4th May
1947, reduce its retail rates for the supply of energy for various G
purposes to its consumers .... " In clause 3 paragraph (e)(i)
(b) it was provided that the "continuous current system shall bie
in use for a limited period of 5 years up to 4th May 1952; or
such longer period as the Government may direct. ... " It was
pro"ided further in clause 3 paragraph (f) (vii) as follows :
"It is desirable that the existing distribution system
viz. as on 4th May, 194 7 should also conform with the
foregoing in all respects .... "
H
MAHARASHTRA ELECT. BOARD V. NAGPUR ELECT. CO.
(Sikri, C.l.)
23
A In clause 3 paragraph ( o) (i), which is the clause which we hav~
to interpret, it was provided as follows :
B
"The option of purchase given by sub-section ( 1)
of section 7 of the Act shall be exercisable on the expiration of ten years or 4th May 1957 and the expiration
of every subsequent period of ten·years during the continuance of this license."
We may mention that there was some debate before us whether
the word "or" in this para was a misprint for "on". We checked
up the original and it is common ground that the word in the original license is "or" and not "on".
In 'the first annex·~ headed "Compulsory Works" (5ee Clause
C
3 of the License) it is provided that the "existing distribution
system together with transformers and control gear as laid in use
on 4th May 194 7 in streets and roads delineated in the deposited
map shall be the Compulsory Works for purposes of the section."
On September 10, 1948, the Electricity (Supply) Act, 1948,
came i.nto force. We need only notices. 71 of this Act under which
D
the rights ·and options to purchase under the Indian Electricity Act.
1910 were deemed to have been transferred to the Provincial
(now State) Electricity Board.
The Indian Electricity (Amendment) Act, 1959 (32 of 1959)
amended the Indian Electricity Act, 1910. We need only notice
E
the insertion of new section 4A ( 1) at present. This reads :
F
H
"4A. Amendment of licensees.-(1) Where in its
opinion the public interest so permits, the State Government, on the application of the licensee or otherwise
and, after consulting the State Electricity Board, and if
the licensee is not a local authority, also the local authority, if any, concerned, may make such alterations and
amendments in tenns and conditions of a license, including the provisions specified in section 3, sub-section
(2), clause (f), as it thinks fit :
Provided that no such alterations or amendments
shall be made except with the consent of the licensee
unless such consent has, in the opinion of the State
Government, been unreasonably withheld."
The purchase of undertakings is to be regulated by s. 6 which
reads :
"6. Purchase of undertakings.
( 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)
24
SUPREME COURT REPORTS
[1972] 3 S.C.R.
Act •. 195?, on t~e expiration of each such period as is
specified m the license; ..... .
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 lb it at the expiry of the relevant period referred to
in this sub-section."
A
B
Sub-section ( 4) of s. 6 provides that "if the State
Eleciricity
Board intends to exercise the option of purchasing the undertaking
under this section, it shall send an intimation in writing of such
intention to the State Government at least eighteen months before c
the expiry of the relevant period referred to in sub-section ( 1)
and if. no such intimation as aforesaid is received by the State
Government the State Electricity Board shall be deemed to have
elected not to purchase the undertaking. Sub-section (6)
of
section 6 provides that "where a notice exercising the option of
purchasing the undertaking has been served upon the licensee
under this section, the licensee shall deliver the undertaking to D
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". Under sub.s. (7), s. 6, "where
an undertaking is purchased under this section, the purchaser shall
pay to the licensee the purchase price detertniiled in accordance with
E
the provisions of sub-section ( 4) of section 7 A".
On September 15, 1965 notice was given to the respondent
under sub-s. ( 1) and sub-s. ( 6) of s. 6 of the Indian Electricity
Act, 1910,. as follows :
"I aril directed to give you notice that t'fte· Maharashtta State Electricity Board has decided to pμrcqase
yo11cr
Electricity Oi1dertaking at Nagpur
(District
Nagpur) in exercise of the option t<:> purchase vested in
the Board by sub-section (1) of section 6 of the Indian
Electricity Act, 1910, and to require you to sell your
said undertaking to the Board on the midnight of 3rd/
4th May 1967 being the date of expiry of the license
granted to you by the Government under the said Act
and also to call upon you under sub-section ( 6) of
Section 6 of the said Act to deliver the said undertaking
to the· Board on the s'aid date of expiry of the said
license pending determination and payment of purchase
price."
Doubts arose as to the interpretation of clause 3 paragraph
( o )( i) of the license, which we have set out above. The State
F
G
H
MAHARASHTRA ELECT, BOARD v. NAGPUR ELECT. CO.
25
(Sikri, C.l.)
A
Government, therefore, decided to amend the para so as to re·
move any doubts that there might be on the matter, and on April
19, 1966, published a notification which reads as follows :
B
c
D
E
F
G
H
"Whereas as required by sub-section ( 3) of Section
4-A of the Indian Electricity Act, 1910 (II of 1910)
a draft of the further amendment proposed to be made
by the Government o~ Maharashtra in the terms and
conditions of the Nagpur Electricity License, granted
by the Government of the Central Provinces, Public
Works Department, Notification No. 46, dated the 4th
May, 1905, as subsequently amended, was published in
Government Notification, Industries and Labour Department No. LNA-(M)-1265/8126-Elec. 1, dat~d the
4th January, 1966, for inviting objections and suggestions :
And whereas no objections or suggestions have been
received by the Government of Maharashtra :
And whereas the Government of Maharashtra has
consulted the Maharashtra State Electricity Board and
the local authorities concerned and obtained the consent
of the Central Government.
And whereas the Government of Maharashtra also
requested the Licensee, the Nagpur Electricity Light &
Power Company Limited, to give its consent to the proposed amendment, as required by the proviso to subsection (I) of the said s~ctiOil 4-A but, in the opinion
of the Government of Maharashtra, such consent has
been unreasonably withheld :
And whereas in the opinion of the Government of
Maharashtra, the Public interest so permits to make the
proposed amendment :
Now, therefore, in exercise of the powers conferred
by the said section 4-A and of all other powers enabling
it in this behalf, the Government of Maharashtra hereby
amends the terms and conditions of the said licence, a~
follows :
·In clause 3 of the license, in paragraph ( o) in subparagraph ( i) for the portion beginning with the words
"shall be exercisable" and ending with the word and
figures "May 1957" the following shall be substituted.
namely :-
"Shall be exercisable on the expiration of the period
of ten years on the 4th May 1957"
3-L864SuiiCl/72
.28
SUPREME COUIT llEPOltTS
[1972] 3 S.C.R.
After this amendment, another notio:e was given under sub-ss.
A
(1) and (6) of s. 6 of the Indian Electricity Act, 1910, on April
26, 1966.
The wording of this notice is similar to the notice
dated September 15, 1965, which we have set out above. This
notice was expressly given in supersession of the earlier notice.
While approaching the Central Government for its consent,
8
the Government of Maharashtra in its letter dated January 17,
1966, stated that "the draft aniendment seeks to remove the ambiguity, if any, .in respect of the date on which the option of purchase is exercisable under the Indian Electricity Act, 1910".
On November 10, 1966, the licensee, the Nagpur Electric
Light and Power Company Ltd., filed the petition under art. 226 C
challenging the aforesaid notice dated Apnl 26, 1966.
The High Court held that the amendments in the license made
in 1947 were in order.
No serious challenge to these amendments
has been made biefore us.
The High Court, however, seems to
have held that the amendment of 1966 was invalid.
The first
D
question which we may deal with is whether the High Court is
right in holding that the amendment of April 19, 1966 was valid
or not. It is common ground that the licensee did not send any
reply to the demand of consent made by the State Government.
The question arises whether the licensee unreasonably withheld
the consent~ It seems to us that in the circumstances of this case
E
there is na doubt that the State Government was entitled to hold
the opfoion that the consent had been unreasonably withheld.
Two interpretations were possible of clause 3 paragraph ( o)
( i) of the license, as it existed before the amendment dated April
19, 1966. One was that the word 'or' had been wrongly used
by some printing mistake and the true word was 'on'. The other F
interpretation was that two dates had been provided for the exercise of the option; one, the expiration of ten years from May 6,
1947, the other being May 4, 1957. Thus there were genuine
doubts about the real date and if the State Government sought
to clarify the point it cannot be said that it made an unreasonable
demand on the licensee.
Every licensee, under the Electricity
G
Act, 1910 <>r the earlier Act, knew that the statute gave an option
to the State Government or a local authority or some board to purchase, and that option had to be exercised after the expiration of
certain periods mCDlioned in the licence. So it was not a case where
Government was providing for the option to purchase which was
not originally intended to be given. We are unable to appreciate
11
the opinion of the High Court that the "amendment effected in
1966 stating that the option to purchase under the Act shall be
exercinble on the expiration of the period of ten years
on
<. ,.
, ..
..
MAHARASHTRA ELECT, BOARD V. NAGPUJ. BLECT, (l(),
27
(Sikrl, CJ.)
A 4-5-1957, is saying something wl!ich is meaningleu and wienforceable." The High Court seems to think that the period of 10
years starting with the commencement of tllat period on May 6,
1947 could never end on May 4, 1957, But this was exactly
the reason why the amellldment was sought to be made in the
license. May 6, 194 7 was a date which had no relevance once
B the amendments of
194 7 are taken into consideration, Tbe
amendments of 194 7 all the time speak of May 4, 194 7 and not
May 6, 1947, The date May 6, 1947 was derived by the follow·
ing process of reasoning, The original license provided that "Che
right to purchase (para (g)) the undertaking, in respect of which
the license is granted, shall for the purposes of the provisions in
c
this behalf contained in the said Act enure after the fOllowing
periods, that is to say :-
( i) after 42 years from the commencement of this
Licence.
(ii) after every subsequent period of 10 years, The
terms of such purchase as aforesaid shall be those
D
set forth in Section 7 of the Act."
Para 4 of the original license provided that "this License shall
come into force and have etlect upon the day when a notification
confirming it is published in the Central Provinces Gazette, and
that day shall for the purposes of the said Act be deemed to be
the commencement of this License". It is this para 4 tllat created
E
the dilliculty because although the notification is dated May 4,
1905, it was published on May 6, 1905. But wllm Ille 1iceme
was .amended in 1947 with the consent of the lieensee it proceeded on the basis that tile 42 years period expired on May 3, 1'47,
because throughoot the crucial eft'ective date in the IUllOIMfmeats
is May 4, 1947,
p
It seems to us that after the amendments para 4 of tbe origiaal
licen!e ceased to have clfect fot the purposes of ooutruiog die
license as amended in 1947 and subsequently,
This takes us to the question whether the notice dated April
26, 1966 is in accordance with law. For the sake of convenience
G we may set out clause 3 paragraph ( o )( i) as amended :
H
"3(o)(i) The option of purchase given by subsection ( 1 ) of section 7 of the Act shall be exercisable
on the expiration of the peri<id of ten years On the 4th
May 1957, and the expiration of every subsequent period
of ten years during the continuance of this license,"
It is th!l case of the licensee thai the date in the notice, viz.
the midnight of 314th May, 1967, is not in compliance with law
and the terms of the licence,
28
SUPREME COURT REPORTS
(1972] 3 S.C.R.
Mr. Sorabjee further submitted the following propositions :
( i) A day is regarded as indivisible period and the
law does not regard fraction of a day;
(ii) , Person for whose benefit period :S prescribed is
entitled to the bentfit. of the entire period.
(iii) Day of the happening of an event or the doing
of an Act ought to be excluded rather than included.
(iv) Notice under s. 6 is a condition precedent and
must be strictly construed.
A
B
He also referred to us some authorities in support of these pro· c
positions.
We need not quarrel with these propositions but the
first three must be regarded as ordinary principles of construction
and yield to the wording and the context of the instrument.
It seems to us that if clause 3 paragraph ( o )( i) is interpreted
in the light of the rest of the amendments made in the license in
194 7, it is quite clear that the previous period was deemed to · D
have expired on May 3, 1947 and the fresh period started on M;zy
4, 1947 and the subsequent periods of 10 years ended on May 3,
1957 and May 3, 1967. It is impossible to read the licenso as
P.mended in 194 7 in any way other than that it was agreed that
the period of 10 years mentioned in the license would start from
May 4, 1947. The details of distribution system (para 2 extracted E
above), the valuation of assets as on May 4, 194 7 and other
elauses extracted above all point to this conclusion.
It was pointed out that the license still talked of sec. 7 of the
Electricity Act. Why was this not amended when it was U11der
sec. 6, as inserted in 1959, that the option to purchase became
exercisable ? It seems to us that it was rightly not amended be1
cause the license still provided for the starting of the period of 10
years from May 4, 194 7. This could only be provided for while
the old sec. 7 stood.
It seems to us that the notice dated April 26, 1966 was in
accordance with the terms of the licence and the law.
G
We accordingly hold that the impugned notice does not suffer
from any infirmity. The appeals are allowed, the judgment of the
High Court reversed and the writ petition dismissed. The parties
will bear ·their own costs throughout.
Parties may mention on
the 17th January,
1972 for passing any . consequential and/or
essential order which may be necessary in the circumstances.
H
G. C.
Appeals allowed.