# MfS. Wfll'IT RAMNAD ELECTRIC DISTRIBUTION CO. LTD v. STATE OF MADRAS

- **Citation:** [1963] 2 S.C.R. 747
- **Court:** Supreme Court of India
- **Decided:** 1963
- **Bench:** P. B. Gajendragadkar, K. Subba 'Rao, K. N. Wanohoo, J. C. Shah, N. Rajagopala Ayyangar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mfs-wfll-it-ramnad-electric-distribution-co-ltd-v-state-of-madras-2546
- **Pages:** 28

## Headnote

Electricity Undertaking-Acquisition-Act Validating action
taken under earlier Acl rleclared ultra vires-Valirlity-lJasis
of comp1Ltation of compensation, if valid-Madras Electricity
Supply Undertakings (Acquisition) Act, (Mad. 43 of 1949),
s. 4-Marlras Electricity Supply Unrlertakings (Acquisition)
Act, 1954 (Mad, 29 of 1954), ss. 5, 24-0onstitution of Inrlia
Arta. 20(1), 81 (1) (2).
By an order dated May 17, 1951, the appellant undertaking vested in the respondent from September 21, 1951,
under the provisions of s. 4( l) of the Madras Electricitv
Supply. Undertakings Act 1949. Thereafter the respondea't
appointed the Chief Electrical Adviser . as the Acquisition
Officer who took over possession on the appointed date, and
a part of the compensation payable under the Act was
paid.
The validity of the said Act, was challenged by
some other electrical undertakings in Madras and in Rajamundkry Electric Supply Corporation Ltd .. v. State of Andkra
Prade•k, the Supreme Court held that the Act of 1949 was
ultra vires. After the said decision was pronounced, the
Madras Legislature passed the impugned Act, the Madras
Act 29 of 1954. The Act incorporated the main provisions
of ~arlier Act of 1949 and purporled the validate action
taken under the said earlier Act. A new Government order was
issued and the Chief Electrical Adviser was appointed the
Acquisition Officer of the apJ'l'llant concerned.
As a result
of this order, the appellant undertaking which had been
taken over by the respondent earlier in 1951, continued to be
in. the possession of the Respondent. The appellant filed
two writ petitions and alleged that to the extent to which
the Act purported to validate acts dono under the earlier
Act of 1949 it was uUra vires, ineffectual and inoperative.
It was further urged that the three basis of compensation laid
down by the Act were inconsistent with the requirements of
1962
l~B
IF''' Ramnt1'I
Ellffrk DUl,ibuliOll
Cv. J,U,
...
SltJll OJ 111-4,M
748
SUPREME OOU~T REPORTS (1963)
Art. 31 of the Constitution, and 10; the operative provison1
of the Act were unconstitutional.
The question was also raised whether or not it was
competent to the Legislature to pass a law restrospectively to
validate· action taken under a void Act.
Held, that it was within the competence of the Madras
Legislature to enact a law and make it retrospective in operation.
The Madras Act, 29 of 1954, in terms is intended to
apply to undertakings of which possession had already been
taken, and that obviously means that its material and operative proviaions are retrospective.
The ell'ect of s. 24 is that if a noti6cation had been
issued properly under the provisions of the earlier Act and
validity could not have been impeached if the said provisions
were themselves valid, it would be deemed to have been
validiy issued under the provisions of the Act, provided, of
course, it is not inconsistent with the other provisiona of the
Act. It is a saving and validating provision and it clearly
intends to validate action taken under the relevant provisions
of the earlier Act which was invalid from the start.
Held, further, that Art. 31(1), of the Constitution, unlike Art. 20(1), does not use the expression "law in force at
the time", it merely says "by authorit) of law" and so, if a
subsequent law pass~ by the Legislature is retrospective in
its operation, it would satisfy the requirement of Art. 31(1)
and would validate the impugned notification in the present
cue. The Lcgialature can pass a law retrospectively valid·
ating action taken under a Jaw which was void because it
conuavened f=damental rights
If the Legislature can by
retrospective legislation cure the invalidity of action taken in
pursi.ance of laws which were void for want of legislative
competance and can validate such action by appropriate pro-
~.
visions, the same po~cr can be equally cfl'cctively exercised
by the Legialature for validating actions taken under lawa
which are void for the reason that they conrra

## Text

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)
2 S.C.R..
SUPREME COURT REPOR'l'S
747
MfS. Wfll'IT RAMNAD ELECTRIC DISTRIBUTION CO. LTD.
v.
STATE OF MADRAS
(P. B. GAJENDRAGADKAR, K. SUBBA 'RAO, K. N.
WANOHOO, J. C. SHAH and N. RAJAGOPALA
AYYANGAR, JJ.)
Electricity Undertaking-Acquisition-Act Validating action
taken under earlier Acl rleclared ultra vires-Valirlity-lJasis
of comp1Ltation of compensation, if valid-Madras Electricity
Supply Undertakings (Acquisition) Act, (Mad. 43 of 1949),
s. 4-Marlras Electricity Supply Unrlertakings (Acquisition)
Act, 1954 (Mad, 29 of 1954), ss. 5, 24-0onstitution of Inrlia
Arta. 20(1), 81 (1) (2).
By an order dated May 17, 1951, the appellant undertaking vested in the respondent from September 21, 1951,
under the provisions of s. 4( l) of the Madras Electricitv
Supply. Undertakings Act 1949. Thereafter the respondea't
appointed the Chief Electrical Adviser . as the Acquisition
Officer who took over possession on the appointed date, and
a part of the compensation payable under the Act was
paid.
The validity of the said Act, was challenged by
some other electrical undertakings in Madras and in Rajamundkry Electric Supply Corporation Ltd .. v. State of Andkra
Prade•k, the Supreme Court held that the Act of 1949 was
ultra vires. After the said decision was pronounced, the
Madras Legislature passed the impugned Act, the Madras
Act 29 of 1954. The Act incorporated the main provisions
of ~arlier Act of 1949 and purporled the validate action
taken under the said earlier Act. A new Government order was
issued and the Chief Electrical Adviser was appointed the
Acquisition Officer of the apJ'l'llant concerned.
As a result
of this order, the appellant undertaking which had been
taken over by the respondent earlier in 1951, continued to be
in. the possession of the Respondent. The appellant filed
two writ petitions and alleged that to the extent to which
the Act purported to validate acts dono under the earlier
Act of 1949 it was uUra vires, ineffectual and inoperative.
It was further urged that the three basis of compensation laid
down by the Act were inconsistent with the requirements of
1962
l~B
IF''' Ramnt1'I
Ellffrk DUl,ibuliOll
Cv. J,U,
...
SltJll OJ 111-4,M
748
SUPREME OOU~T REPORTS (1963)
Art. 31 of the Constitution, and 10; the operative provison1
of the Act were unconstitutional.
The question was also raised whether or not it was
competent to the Legislature to pass a law restrospectively to
validate· action taken under a void Act.
Held, that it was within the competence of the Madras
Legislature to enact a law and make it retrospective in operation.
The Madras Act, 29 of 1954, in terms is intended to
apply to undertakings of which possession had already been
taken, and that obviously means that its material and operative proviaions are retrospective.
The ell'ect of s. 24 is that if a noti6cation had been
issued properly under the provisions of the earlier Act and
validity could not have been impeached if the said provisions
were themselves valid, it would be deemed to have been
validiy issued under the provisions of the Act, provided, of
course, it is not inconsistent with the other provisiona of the
Act. It is a saving and validating provision and it clearly
intends to validate action taken under the relevant provisions
of the earlier Act which was invalid from the start.
Held, further, that Art. 31(1), of the Constitution, unlike Art. 20(1), does not use the expression "law in force at
the time", it merely says "by authorit) of law" and so, if a
subsequent law pass~ by the Legislature is retrospective in
its operation, it would satisfy the requirement of Art. 31(1)
and would validate the impugned notification in the present
cue. The Lcgialature can pass a law retrospectively valid·
ating action taken under a Jaw which was void because it
conuavened f=damental rights
If the Legislature can by
retrospective legislation cure the invalidity of action taken in
pursi.ance of laws which were void for want of legislative
competance and can validate such action by appropriate pro-
~.
visions, the same po~cr can be equally cfl'cctively exercised
by the Legialature for validating actions taken under lawa
which are void for the reason that they conrravened fundamental rights.·
Held, also, that the failure of the Legislature to refer to
the fair ·market value cannot, be regarded as conclusive or
even presumptive evidence of the fact that what is intended
to be paid under s. 5 does not amount to ajust equivalent
t
of the undertaking taken over.
After all, in considering the
j
2 S.C.R.
SUPREME COURT R~PORTS
749
question as' to whether compensation payable under one or
the other of the bases amounts to a just equivalent, the court
must try to assess what would be payable on the said basis
of market value.
It may be that in some basis B may work hardship
and conceivably even basis A or basis C may not be as satisfactory as it should be ; but when a party challenges the
! validity of a statutory provisions like s. 5~ it iS necessary that
\ the party must adduce satisfactory and sufficient material
I before the Court on which it· wants the court to hold that
· the compensation which would be paid under everyone of
the three bases under the impugned statutory provisions docs
not amount to a just equivalent. Looking merely at the
scheme of the section itself, it is impossible to arrive at such
a conclusion.
Namsaraope.ta Eltctric
Corporatwn Ltd. v. State of
MadrlJll, (1951) II M. L. J, 277, RajamunartJ Eltctric Supplg
Cnrporalion Ltd. v. State of Anakra, (1954] S. C. R. 779, and
Dtep Chand v. State of U. P., (1959) Supp. 2 S. C.R. 8,
referred to.
.
CrVIL APPEIJ.A'l'E JURISDICTION : Civil Appeals
Nos. 512 and513 of 1960.
Appeal from the judgment an~. order dated
March 27, 1956, of the Madras High Court, in
Writ Petition Nos. 326 of 1955 and 107 of 1956.
M. K. Nambiyar and P. Ram Reddy for the
appellant.
·
R. GaMpathy Iyer and P. D. Menon, for the
respondents. .
· ,
Illfll
WeB' RlllfltlSJ
Elktric Distrillulion
Ca. Lid •
••
Stat• of Madras
)·
R. Gqpal,akrishnan, for the Intervener No. l.
K. Bhimsan/c,,,:ran, B. R. G. K. Aohar and
P. D. Menon, for the intervener No. 2.
1962. May 2. The Judgment of the .Court
was delivered 1 by
GAJENDRAGADKAR, J.-The · principal quesGajmdragadkar J
tion which arises in these two appeals is related
to the validity of s.24 of the Madras Electricity
INI
.., ... Rom ...
BUctrit Dilfriktio.
Co. [,Jd.
••
Sl•ll of JI adru
Ga;,.6ragadlw J.
750
SUPREME OOURT REPORTS [1963]
Supply Undertakinge(Aoquisition) Aot, 1954 (XXIX
of 1954) (hereinafter called the Act). That question
a.rises in this way. The appellant. the West Ramnad
Electric · Dist.ribution
Co.
Ltd.,
Rajapalayam,
WllB im•orporated in. 1935 to carry on, within the
State of Madras and elsewhere, the business of an
electric light and power company, to construct, lay
down and establish and cany on all necessary inetallations, to generate, accumulate, distribute and supply
electricity under a licence granted under the Indian
Electricity Act of 1910. On the 21th .fan•1ary, 1950,
the Madras Legislature paascd an Act (XLIII) of
1949) for the acquisition of undertaking supplying
electricity in the Province of Madras.
Under the
said Aot, the Government was empowered to
acquire any e\eotrioal undertaking on payment of
compensation according to the relevent proviaiomi
of the ft \id Act. In pursuance of the provisions of
11.4( l) of the said Act, the reRpondent., State of
Madrll8, pa.seed on Order C.O. Ms. No.2059 on the
17th May, 1951, declaring that the appellant undertaking shall vest in the respondent from the 2 lst
September, 1951.
Thereafter, tht1 respondent appointed the Chief Electrical Inspector as the Acquisition Officer, and on the appointed day, the said
Officer took over poSBession of the appellant and
all its ll88ets, records and account-books. The appella.nt then appointed the liquidator as its Accredited
Repreeentativl' for the purposes of the Act in order
to claim compensation under the Act. The respon·
dent then paid over to the appellant Rs. 6 lakhs on
the 24th October, 1952 and Rs. 2,34,387-1-0 on the
5th July, 1953, as compensation. According to the
appellant, RI!. 98,876-15-0 still remained to be paid
to it by way of oompeneation under the Act, whereas the respondent suggested that only Rs. 6000/-
Wll.ll the balance due to the appellant. That is how
the appellant undertaking went into po88Casion of
' '
j
,,
2 s.c.R.
SUPREME COURT REPORTS
751
the respondent and the appellant was paid partial
compensation.
It appears that owners of some of the, electrical
undertakings in Madras which had been taken over
by the respondent in accordance with the provisions
of s.4(1) of the 1940 Act, filed writ petitions in the
High Court of Madras impugning the validity of
the said Act. These writ petitions however, failed and
by its judgment in N arasaraopeta Electric Corporation Ltd. v. State of Madras() the Madras High Court
upheld the validity of the impugned Act in so far
as it related to the licensees other than municipali·
ties. , The said licenses then moved this Court and
their appeal succeeded. By its decision in the
Rajamundry Electric Supply Corporation Ltd. v.
The State of Andhra ('), this Court held that the impugned Act of 1949 was ultra vires. This decision
was based on the ground that the Act was beyond
the legislative competence of the Madras Legislature
inasmuch as there was no "ntry in any of the three
Lists of the Seventh Schedule of the Government
of India Act, 1935 relating to compulsory acquisition of any commercial or industrial undertaking.
This Court ohservej that although s.299(2) of the
said Constitution Act contemplated a law authorising
compulsory acquisition for public purposes of a
commercial or industrial undertaking, a corresponding
entry had not been included in any of the three Lists
and so, the Madras Legislature was not competent
to pass the impugned Act. This decision was pronounced on the 10th February, 1954.
Meanwhile, the Constitution came into force
on the 26th January-, 1950, and the position of the
legislative competence of the Madras Legislature in
reepect of the compulsory acquisition of commercial
or industrial undArtakings for public pnrposAs has
been materially al\ered., En•ry 36 in List II of
(1) (19~1) 11 M.L.J,217;
t2) {llH)S.Q.JJI.
IHI
WestRamnad
Electric Dt11ribufion
C.. Ltd.
. ..
Slate of Madr ..
Gajmdtagadl•" J.
Weu R•IHHMI
Ekctric Di.stributin
C.. LtJ.
v.
Sl•le of Id.Mat
752
SUPREME COURT REPORTS [1963]
the Seventh Schedule to the Constitution refel'8 to
acquisition or requisitioning of property, except for
the purposes of the Union, subject to the provisions
of entry 42 of List III, whereas entry 42 of List III
deals with the principles on which compensation for
property acquired or requisitioned for the purposes
of the Union or of a State or for any other public
purpose is to be determined, and the form and the
manner in which such compensation is to he given.
That is how the two entries read e.t' the relevant
time.
After the decision of this Court waa pronounced in the case of Rajamuudry Electric Supply
Corpn. Ltd. (1), the Madras Legislature pe.1111ed the
Act and it received the e.ssent of the President on
the 9th October, I !154, and was published in the
Governm~nt Gazette on the 13th October, 1954.
The Act incorporated the me.in provisions of the
earlier Act of J 949 and purported to validate
action ta.ken under the so.id earlier Act. After the
Act was pa.seed,
the respondent issued a new
Government Order No. 4388 on the 14th Deoomber,
11154, appointed the Cbicf Electrical Inspector to
be the Acquisition Officer of the e.ppelle.nt oonoern
for purposes of the Act. As a l't'8Ult of this order,
the appellant undertaking which had been ta.ken
over by the respondent on the 21st September, 1951,
continued to be in the possession of the respondent.
It is under these ciroumste.ncee that the e.ppelle.nt
filed ita writ petition No. 326 of 1955 on the 26th
.April, 1955.
In ita writ petition, the appellant alleged that
to the extent to which the Act purports to validate
acts done under the earlier Act of 1949, it is tiltra
vires, ineffectual and inoperative. It \V&S further
urged that the three bases of compensation a11 laip
(I) (195•) S.CJl. 779,
,
2 s.c.R.
SUPREME. COURT REPORTS
753
down by the Aot are inconsistent with the require-
,/ ments of Art. 31 of the Constitution and so, the
operative provisions of the Act are unconstitutional.
On these grounds, the appellant prayed for a writ
of Certiorari or any other appropriate writ, or order
or direction calling for the records relating to G.O.
Ms. No. 2052 issued on the 17th May 1951 and
quashing the same. Later, the appellant filed another writ petition No. 107 of l95tS on the 31st
January, 1956, and it added a prayer.that a writ of
"r Mandamus or
any other writ, or order, or
direction should be issued directing the respondent to restore posRession of the appellant
undertaking with all its assets along with masne
profits from 21st
September, 1951 or pay the
market value of the said undertaking as on 21st
September, 1951 and interest thereon @ 6 per cent.
per annum, and to direct pa.yment of costs and pass
such other orders as may be appropriate and just
in the circurutances of the case.
'(.·
The claim thus made by the appellant was denied
~ by the respondent.
Th(! respondent's case was
that the Act is
valid and s.24 which .operates
retrospectively has validly and effectively validated
actions taken under the earlier Act, with the result
that the possession of the appellant undertaking
which was taken on the 21st September, 1951, must
be deemed to have been taken under the provisions
of the Act and so the claim made by the appellant
) . either ·for a writ of certiOrari or mandamus could
. not be granted
It was also urged that it would
not be open to the appellant to claim possession of
the undertaking or to ask for mesne profits in writ
proceedings.
Mr. Justice Rajagopalan · who heard thEI two
writ petitions, rejected the contentions raised
by the appellant and dismissed the said petitions.
A He held that having regard t.o the fact that the
/912
.-:..-
W eat RC1mn1d
Elec11ic Dislributibn
Co: Lid,
v.
Seate of Madma
Oajind1agadk'ar J.
'
JIU .-
w ... B.-J
11'- Ddlrif>lllU.
C..LU.
Y.
s-•f Jllllr,,
-
764
SUPREME OOUR'f' REPORTS (1963)
appellant h&d accepted compensation under the
earlier Act, no real relief could be granted to it
,
even if its contention thats. 34 of the Act wae invalid in uphold. In other words, t.he learned Judge
took the view that even if.the challenge m&de by
the appellant to the validity · ol s. 24 was found to
be justified, in the preseont writ proceedings he
would not be prepared to grant it the relief either
of posse88ion or of mesne profits. Even so, the
learned Judge proceeded to examine the several
points urged by the appellant ill support of its .,
contention that s. 24 was invalid, and rejected
them. In his opinion, the Act was valid and s. 24
heing retrospective in operation,
validated the
actions ta.ken by the respondent under the earlier
Act. The argument that the compensation awa.rdable under the Act was inconsistent with Art.
31(1) and 31(2) was not a.ocepted, inter alia, on the
ground that 110 material had been placed before the
Court on which the appellant's plea could be sustained. The learned Judge has also recorded his
conclusions on Rome other points urged before him,
'
but it is unmiceeeary to refer to them.
After this •
decision was pronounced, the appellant moved the
learned Judge for a certificate under Art. 132(1)
of the Constitution and it is with the certificate
thus granted to it under the aa.id Article that the
present appeals have been brought to this Court.
The first point which Mr. Nambiar has raised
before us on behalf of the appellant is that s. 34
which purports to Talidate action ta.ken under the ',,
earlier Act is, in law, ineffective to sustain the
order iBSued by the respondent on the 17th May,
l 951. It would be recalled that by thia order,
the respondent obtained poeseesion of the appellant
undertaking for the first time under the relevant
provisions of the earlier Act.
The argument is
that t.here is no specific or expresa provision in the t
Act. which mall.ea tile A• ft!Umpeoti"Ve 1111d m, L 2~
2 S.C.R.
SUPREME COURT REPORTS
755
even if it is valid, is ineffective for the .Purpose of
I96B
sustaining the impugned order by which possession of
w ... Ramnad
the appellant concern was obtained by the responEuctric Dislrlbulion
dent. The impugned order had recited that the
Co. Lid.
appellant concern shall vest in the Government
Stau of Madras
on the 21st September, 1951, and it directed that
under s. 4(2} of the earlier Act tl:J,e said order shall
GafetuJragidkar J,
be published in the Gazette. Unaer the said order
a further direction had been issued appointing the
Chief Electrical Inspector to the respondent to be
the Acquisition Officer, and the appellant was requested to take action for the appointment of an
accredited respresentative in
accordance with
s. 8 of the earlier Act and to submit the inventories
and all particulars required under s. 17 of the s&id
Act. Mr. Nambiar contends that this order amount.a
to a notification which must be held to be a law
· under Art. 13 of the Constitμtion.
For the purpose of the present appeals, we will assume that
the said order is notification amounts to a law
under Art~ 13. Mr. N1tmbiar further contends that
this notification was invalid for two reasons; it
was invalid because it had been issued under the
· Provisions of an Act which was void as being beyond the legislative competence .of the Madras
Legislature, and it was void for the additional
rea~on that before it was issued, the Constitution
of India had come into force and it offended against the pr . visions of Art. 31 of the Constitution,
and so, Art. 13(2) applied. Section 24 of the Act,
no doubt, purported or attempted to validate this
notification, but the said attempt has failed beca_
use the Act being prospective, s. 24 cavnot have
retrospective operation. That, in substance, is the
first contention raised before us.
Before dealing with this argument, it would
be necessary to 'examine the broad features of the
Act and understand its general scheme. The Act
was fBBlled becauae the :Madras Leplature thougllt
19111
w.11 Ra,,.,.M
IJUcbi& DN"liuliM
Go.Lid.
••
8"'11 ef M .Jrss
Gaj,,,,.,ap/lor J.
756
SUPREME CJOURT REPORTS (1963]
it expedient to provide for the acquisition of under
takings other than those belonging to and under the
control of the State Electricity Board c:mstituted
under section 5 of the Electricity (Supply) Act,
1948 in the State of Madras engaged in the bueineBS of supplying electricity to the public. It is
with that object that appropriate provisions have
been made by the Act to provide for the acquisition of undertakings and to lay down the principles
for paying compensation for them_ It is quite
clear that the scheme of the Act was ta bring within the purview of. its material provisions undertakings in respect of which no action had been
taken under the earlier act and those in rllSpect
of which action had been so taken. In fact, as we
will presently point out, several provisions made by
the Act clearly referred to both typea of undertakings and leave no room for doubt that both types
of undert-.kings arl' intended t\> be governed by it.
The definition of an 'accredited representative'
prescribed by s. 2(b) shows that the accredited
representative means the representative appointed or
deemed to have
been appointed under s. 7.
Similarly, s. 2(j) which defines a licensee provides that in relation to an undertaking taken
over or an undertaking which has vested in the
Government under s. 4, it shall be the prrBOn
who
was the
licensee at
the time when
the undertaking was taken over or ve~ted is
the Government as the case may be, or his
su•;cessor-in-interest. &>ction l! (e) defines an undertaking taken over as meaning an undertaking taken
over by the Government after the 1st January, 1951
and before the commencement of this Act. The
'vesting date' under s. 2 (m) mean~ in relation to an
undertaking, the date fixed under s .. 4 ( l) as t-he
date on which the undertaking shall vest in the
Government or in the caee of an undertaking taken
over, the dUe on which $wee taken over. 'l'hellQ
• •
l
2 S.C.R.
SUPREME OOURT REPORTS
757
definitions thus clearly point out that the Act was
intended to apply to undertakings of which possession would be taken after the Act was passed as well
as undertakings of which possession had already
been taken under the relevant provisions of the
earlier Act.
Section 3 which deals with the application of
the Act, provides that it shall apply to all undertakings of licensees including: (a) undertakings in
·y
resJ>llct of which notice for compulsory purchase has
been' served under s. 7 of the Electricity Act, such
undertakings not having been taken over before the
commencement of this Act; and (b) undertakings
taken over. Similarly, section 4 which gives powers
to the respondent to take over any undertaking
clearly says that that power· oan be exercised in
respect of any undertaking which had already not
1 been taken over. In dealing with the appointment
of sole representative, s. 7, sub-ss. · (3) and (5) bring
out the same distinction between undertakings al-
"\
ready taken over and those .which l:ad yet .to be
~
taken over. The same distinction is equally clear·
ly brought out in s. 10 (3), 11_ sub-s.(2), (5) and (11).
and s. 14 ( 3).
It is thus clear that the · Act, in
terms, is in!;ended to apply to undertakings of which
possession had already been taken, and that obviously means that .its material and operative provisions
are retrospective. Actions taken under the provisions of the earlier Act are deemed to have been taken
_)
under the provisions of the Act and posseilsion taken
under the said earli11r provisions is deemed to have
been taken under the relevant provisions of the Act.
This retrospective operation of the. mattitial provisions of the Aot is thus writ large in all the relevant
provisions and is an essential part of the soheqie of
the Act. Therefore, Mr. Nambiar is· not right when
.\.·
he aeanmes that the rest of the .Act is intended .to be
proepective and so,· aeotion 2' ahoQlcl ·be· ~
1163
Well R...,.od
Ekmi< l>Ulrilndiln
·co. Lid. ·
••
S144 of M'll/rut:
tla~o,adlca• ,/,
1966
West Ra111n•d
E l«tric Diat1ibulio11
Co. Ltd.
..
S""'of Ma4ror
•
758
SUPREME OOlJRT REPOKTS [1963]
in the light of the said prospective character of the
Act.
On the contrary, in construing s. 24, we have
to bear in mind the fact that the Act is retrospective in operation and is intended to bring within
the ~cope of its material provisions undertakings
of which poeeeeeion had already been taken.
Let us then conRtruc s.'24 and decide whuther it
sp,rves to validate the impugned notification issued
by the re~pondent on the 2 lst September, 19,;1.
Section 24 reads thus:
"Orders made, decisions or directions given,
notifications issued, proceedings taken and
acts of things done, in relation to any undertaking taken ever, if they would have been
validly made, giv.,n, ieeued, taken or done,
had the Madras Electricity Supply Undertakings (Acquisition)
Aot,
1949
(Madras Act
XLIII of 1949), and the rules made thereundrr been in force on the date on which the
said orders, decisions or directions, notifications, proceeding, acts or things, were made,
given. ieeued, taken or done are hereby declared
to have bei-n validly ma.de, given, issued, taken
or done, a.a the case may be,
except to the
extent to which the said orders, decisions,
directions, notifications, proceedings, acts or
thinl!'s a.re repugnant to the provisions of this
Acts."
The first part of tbe section deals, inter alia,
with notifications which
have been validly iSBued
tmder the relevant provisions of the earli~r Act and
it means that if the ea.rlia.r Act had been valid a.t
the rell.'vant time; it ought to appear that the notifications in question could have boon and had in fact
been m~do properly under the ea.id Act. In other
words, b<>fore any notification can claim the benefit
of 1. 24, it mUBt be 8h(\wu that. it. was i&!ued properly
under Uw
rele-van~ provieio1111 of the earlier A°'-
• '
I •
)
)
2 S.C.R.
SUPREME COURT REPORTS
759
assuming that the said provisions were themselves
valid and in force. at that time. The second part
of the section provides that the notifications covered
by the first part are declared by this Act to have
been validly issued; the expression "hereby declared" clearly means "declared by this Act" anq that
shows that the notifications covered by the first
part would be treated as issued und<ir the relevant
provisions of the Act and would be treated as validly issued under the said provisions. The third
part of the section provides that the statutory declaration about the validly of the issue of the notification would be subject to this exception that the
said notification should not be inconsistent wit-h or
repugnant to the provisions of the Act. In other
words, the effect of this section is that if a notification had been issued properly under the provisions
of the earlier Act and its validity could not have
been impeached if. the said provisions were them·
selves valid, it would be deemed to have been validly
issued under the provisions of the Act, provided, of
course, it is not inconsistent with the other provis·
ions of the Act. The section is not very happily
worded, but on its fair and reasonable construction,
there can be no doubt about its meaning or effect.
It is a saving and validating provision and it clear·
ly intends to validate actions taken under the releva.nt provisions of the earlier Act which was invalid
from the start. ·The fact·that s. 24 does not use
the usual phraseology that the notifications issued
under the earlier Act shall be deemed to have been
issued under the Act, does not alter the position
that the second part of the seotion .has and is intended to have the satne effect.
'
No doubt, Mr.
Nambiar suggested
that
s. 24 does not seem to validate actions taken
under the earlier Act on the basi11 · that the
earlier A ct was void
and
noneat
and in support of this . argument, he
ralies
on
the
W 111 RilmRlld
El11:trio Dit~ibution
Oo. Lid.
v.
Sl•'4 of Mathos
GoJmtlragadkar J.
19~
W11• RoflMIMI
E11<fri< Dl.rf<i6ulioo
c •. w
•.
s .... •f .lladttu
01.jt1ttba, odla1 J.
760
BUPREMtr. OOURT REPORTS (1963)
foot that
the notifica.tion folfowing under the
first pRrt of s. 24 are refened to as validly made
and the earlier Act and the rules made thereunder
are 888umed to have beon in force on tho dato on
which the said notification was issued. He also
relies on the provisions of s. 25 which purports to
repeal the said Act and that, no doubt, gives room
for the argument that the Legislature did nofreoognise that the said Act was nonest and dead right up
from the start. It is not e!llly to understand the genesis of s. 2/\ and the purpose which it is intended to
achieve.
The
only explanation given by Mr.
Gaopati Aiyer on behalf of respondent is that since
the earlier Act was in fact on the statute book, the
legislature may have thought that for the sake of
form, it may have to be repealed formally and so,
s. 25 was enacted. But even if the enactment of
the said section be held to be superfluous or unnecessary, . that cannot assist the appellant in the
construction of s. 24.
We have no doubt that s. 24
was intended to validate actions taken under the
earlier Act and on its fair 'and reasonable .construction, it must be held that the intention has been carried out by the legislature by enacting the said section.
Therefore, the argument that s. 24, even if.valid,
cannot effectively validate the impugned notification, oaonot succeed.
'
Mr. Nambiar then contends that the impugned notifioa.tion is invalid and inoperative because
it contravenes Art. 31 ( l) of the Constitution.
Article 31 ( l) provides that no person shall lie
deprived of his property sa."Ye by authority oflaw.
It is urged that this provision postulates the existence· of an antecedent law, before a citizen is
deprived of his property. The notification was
issued on the a.ssump,ioo that there was an antecedent law, viz., the earlier Act of 1949 ; but since
the ea.id Act wu oooest, the notification is not
aupported b7 the authorit7 of an7 pre-uiating law
• •
J
,\
2 s.c.a.
SUPREME OOURt RIPOR'fS
761
'11/fJB
W111 Ramnad
E/,,e;.~ Distribution
Co. Ltd .
••
Slate oJ Morl•a1
and so, it must be held to be invalid and ineffective' In our opinion, this argument is not wellfounded. If the Act is retrospective in operation
and s. 24 has been enacted for the purpose of retrospecti vely validating actions taken under the
provisions of the earlier Act, it must ·follow by the
very retrospective operation of the relevant provisi- . Goj<ndmgailkar "·
ons that at the time when the impugned notification
was issued, these provisions were in existence. That
is the plain and obvious effect of the retrospective
operation of the statute. Therefore in considering
whether Art. 31(1) has been complied with or not,
we must assume that before the notification was
issued, the relevar.t provisions of the Act w,ere in
existence and so, Art. 31(1) must be held to have
been complied with in that ;sense.
In this connection, it would be relevant to
refer to the provisions of Art. 20 ( l ), because the
said provisions illustrate 'the point that where the
Constitution desired to prevent the retrospective
operations of any law, it has adopted suitable
Phraseology to carry out that object. Art. 30 (l)
provides that no person shall be . convicted of any
offence except for violation of a law in force at the
time of the commission of the act charged as an
offence, nor bu subjected to a penalty greater than
that which might have been inflicted under the law
in force at the time of the commission of the offence.
By using the expression "law in force" in both the
parts of Art. 20 (l), the Constitution has clearly
indicated that even if a criminal law was enacted by
any legislature retrospectively, its. retrospective
operations would, be controlled by Art. 30(1 ). A law
in force at the time postulates actual factual existence of the law ·at the relevant time . and that
excludes the retrospective application of any subsequent law. Art. 31(1), on the other hand, does not
use the expression "law in force at the time" It
JHB
WutBGWtoJ
EJ"~ Di.Wthtia.
c •. LU.
••
St.,.qf MtU,a,
762
SUPll.EME OOURT REPORTS (1963]
merely says "by authority of law", and so if subsequent law paBBed by the legislature is retrospective
in its operation would satisfy the requirement
of Art. 31 (l) and would validate the impugned
notification in the present case. Therefore, we are
not satisfied that Mr. Nambiar is right in contending
that the impugned notification is invalid for the
reason that at the time when it was i111111ed there was
no law by whose authority it could be sustained.
That takes us to the larger iBBue raised by
Mr. Nambiar in the present appeals.
He contends
that tho power of the legislature to make JawR
retrospective cannot validly be exercised so as to
care the contravention of fundamental rights retros·
peotively. His contention is that the earlier Act
of 1949 being dead and non-existent, the impugned
notiffoation contravened Art. 31(1) and this contravention of a fundamental right cannot be cured by
the legislature by passing a subsequent law· and
making it retrospective. In support of this argument, he has relied on the decision of this Court in
Deep Chand v. The State of Uttn,r Pra<ksh (1). In that
O&Se, one of the questions which arose for decision
was whether the doctrine of aolipse applied to a law
which was found to ho invalied for the reason that
it contravened the fundamenta! rights, and the
majority decision held that it did not apply to such
a Jaw.
In deeling with a question as to the appli·
cability of the doctrine or eulipse, a distinction was
drawn between a law which was void either for
want of legislative power at the time when it was
passed, or because it contravened fundamental
rights on the one hand, and the law which was
valid when it was p888ed but subsequently became
invalid because or supervening circumstances on
the other. In the latter case, the law was valid
when it was paBBed and became invalid because
a cloud w&a cast 011 its validity by supervening
(I) (I !159) Supp. 2 S.c.L L
(
Il
2 S.C.R.
SUPREME COURT REPORTS
763
Y circumstances. That being so, if the constitutional
amendment subsequently made. removes the cloud,
the validity of the law is revived. That is the effect of
application of the doctrine of eclipse; but there can
be no scope for the application of the said doctrine
to a law which is void and nonest either for want
of legislative competence or because it contravenes
fundamental rights.
That, in substance, is the
"'. effect of the majority decision in Deep Chand's
case. In the present appeals it is not disputed
.that the earlier Act of 1949 was dead and void
from the start, and that no doubt, is consistent
with the majority decision in Deep Chand's c&Be,
But the question as to whether the legislature can
retrospectively validate actions taken under a void
law did not arise for consideration in Deep Chand's
case~ The only point which was decided was that
the removal of the cloud by a imb9equent constitutional amendment wilh1ot automatically revive a
law which was void from the st1ut, but that obviously is not case before us. What we are called
upon to decide is the present appeals is whether or
not it is competent to the legislature to pass a law
retrospectively to validate actions taken under a
void Act, and in deciding this question, Deep
Chand's case would not afford ue any assistance.
'···
Mr. Nambiar did not dispute the position that
in enacting laws in respect of topics covered by
appropriate entries in the relevant Lists of the 7th
Schedule to the Constitution, the legisla.tures would
be competent to make the provisions of the laws
passed by them retrospective. He, however, seeks
to import a . limitation on this legislative power
where the contravention of fundamental rights is
involved. No authority has been cited in aupport
of the plea that the legislative pqwer of the legialature is subject to any such limitation even where
the contr1.1.vention of fundamental rights is involved.
On principle, it is difficult to appreciate how snob
191Jt
W18t 11amn•I
Eleet• io Distribu&/on
c •. Lid.
...
StalH/ >I •dro•
Gaj1ndrogtd.W J.
West RGmnlltl
EUar;1 Dut,ibwU.
Co. LU •
••
Stal.,} M U.0.
"•Jmb•pdkar J,
7M
SUPREME OOURT REPORTS [1963)
a limitation on the legislative power oa.n be effectively pleaded. If a la.w is invalid for the mason
that it has been pa.seed by a legislature without
legislative oom}X'ta.nce, a.nd action is \a.ken under
its provisions, the said a.oiton can be validated by
a subsequent la.w pa.11eed by the same legislature after
it is clothed with the necessary legislative power.
This position is not disputed. If the legislature can
by retrospective legislation cure the invalidity in
actions taken in pursuance of la.we which were void
for want of legislative competence and oa.n validate
such action by appropriate provisions, it is difficult
to see why the Sa.me power cannot be equally effect·
ively exercised by the legislature in vs.Iida.ting
a.otions ta.ken under la.w which a.re void for the
reason that they contravened fundamental rights.
As ha.a baen pointed out by the majority decision
in Deep Ch1md's case, the infirmity proceeding
from lack of lPgislative competence as well a.a the
infirmity proceeding from the contravention of
fundamental rights lead to the same result and
that is that the offending legislation is void and
honest. That being so, if the legislature can validate
actions taken under one cla.ss of void legislation,
there is no reason why it cannot exercise its legislative power to validate actions taken under the otl.ter
class of void legislation. We are, therefore, not
prepared to accept Mr. Nambiar's contention that
where the contravention of fundamental rights is
concerned, the legislature cannot pass a law retrospectively validate actions ta.ken under a law which
was void because it contravened fundamental
right..
In th is connection, it may be useful to refer
to some decisions which deal with the legisbture's
power to pass retrospective laws. In the United
Provinces v. Mst. Atiqabegum (') G' "J
r C.J. observed
that "the validation of doubtful 11xecutive acts is
(I) (1940) F.C.R· 110, 136.
,.
•
2 S.C.R.
SUPREME COURT REPORTS
765
not so unusual or eld;raordinil.ry a thing that little -
1961
surprise would be felt if Parliament had overlookedw .. , a.mna<1
it, and it would take a great deal to persuade me
Elect•ie Dittribulion
that the legislative power for the purpose has
C•;.Lld .
. been denied · to every Legislature, including the
Btak "' Madru
Central or Federal _Legislature, in India." It_ is
ca;endragadkarJ,
true, "he added," that 'validation of executive
orders or any entry even remotedly analogous to
it is not to be found in any of the three lists; but
I
am clear that legislation for that purpose
must
ne~eBBarily be
regarded as
subsidia.ry
or ancillary to the power of legislating on the
particular eubjects
in
respect of which the
executive orders may have been issued." The
same principle was· stated by Speans C. J. in Piare
D'U(l(J(J,h v. The Ki71{1 Emperor.(')
This que1<tion has been considered -by this
Court in several decisions to some of which we will
now briefly refer. In the Union of India v. M<U!Jln
-•1
Gopal Kabra ('~•- this Court had occasion to consider
"
the validity of certain amendments ma<le in the
Income Tax Act · by section 3 of the Finance Act
(XXV of 1950). These amendments had the effect
of applying retrospectively the chargin11: sections
of the Taxing Act
and
their
validity
was
impeached.
In rejecting the ·agrument that the
levy authorised to be imposed by the amendments
was ultra ,vires, Patanjali. Sastri, C. J., observed that
)
"while it is true that the Constitution has no retros-
,
_pective operation, except where a different intention
clearly appears, it is not correct to say that in
bringing into existence new Legislatures and confering on them certain powers of legislation; the
Constitu~ion operated retrospectively. The legis·
lative. powers conferred upon Parliament under
Articles 245 and 246 read with List I of the Seventh
Schedule cou],~ "bviously be exercised only after
(I/ (1944) F.C.R.~J, tns.
(2) (19St) s.c.R. S41,554.
Wea R."'*"
Bluh '>r•lribulion
c.. L.14 •
••
8141,.J Mo<INI
-
Ga}< '"°' ·"- J.
766
SUPREME OOURT REPORTS [1963]
the Constitution came into force and no retrospective operation of the Constitution is involved in
the conferment of these power8. But it is a different thing to s&y that Parliament in exercising the
powers thus acquired is precluded from making a
retrospective law,'' and so, the conclusion was that
Parliament was content to make a law imposing a
tax on the income of any year prior to the
commenoement of the Constitution.
In M. P. V. Buwfararamier &: Co. v. The Btau
of Andkra Praduh (1), the validity of the Sales Tax
laws Validation Act, 1956 (7 of 1956) waa questioned and t.he majority of the Court held that the
said Act was in substance one lifting the ban on
taxation of
inter-~tate sales and within the
authority conferred on the Parliament under Art.
286(2) and further th"t under that provision, it was
competent to the Parliament to enact a law with
retrospective operation. This conclusion also pro·
oeeded on the basis that the Power of a Iegisl1<ture
to p&BB a law included a power to p&88 it retros·
pectively, and so, the argument that the impugned
Act waa ban on the ground that it was retrospective
in operation was reject.id.