TMI Blog2004 (1) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 36.36 crores. The project comprised construction of 51 meter high concrete dam on the river Barapani near Hatidubi for utilising flow of water from catchment area of 1178 Sq. km. The installed capacity of the project was 2 x 50 MW. The dam was to be completed in the year 1986, but due to the failure of the local contractor, the project could not be completed and the Board terminated the contract and protracted litigation ensued. In the year 1992, after termination of the contract as aforesaid, the project was entrusted to National Project Construction Corporation (in short 'NPCC'), but the similar fate followed and Board had to terminate their contract as well in December, 1992. In the mean time, cost of the project initially sanctioned at ₹ 36.36 crores rose to ₹ 189.90 crores. Out of the aforesaid estimate, the work completed was of about ₹ 116 crores and the Board needed about ₹ 60 crores to complete the project excluding other liabilities. The Board could not generate the additional fund required for completing the project. The Central Government in the year 1992-93 accepted the policy of privatisation even in the power sector. The S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 to complete the work within the extended period, the MOU was liable to be terminated and repudiated. On 30th November, 1996 the State of Assam, keeping in view, the inordinate delay in the completion of the project and to safeguard the public interest by completing the project as early as possible in the context of acute power shortage in the State, promulgated Bharat Hydro Power Corporation Limited ( Acquisition and Transfer of Undertaking) Ordinance, 1996 acquiring the undertaking of Karbi Langpi Project of appellant No.1. The Ordinance was subsequently replaced by Bharat Hydro Power Corporation Limited (Acquisition and Transfer of Undertaking) Act, 1996 (hereinafter referred to as 'the Act'). On 1st December, 1996, the State Government by Notification transferred to and vested the said project in the Board. After the said notification the possession of the project was handed over to the Board in the presence of the representatives of the both sides on 2nd December, 1996. On 5th December, 1996 Memorandum of handing over and taking over was signed. Thereafter writ petitions being CR 6/97 and CR 283/97 were filed in the High Court of Assam challenging the legality and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment may think fit to impose, direct by notification, that the undertaking of the company and the right, title and interest of the company in relation to its undertaking which has vested in the Government, vest in the Board either on the date of the notification or on such earlier or later date as may be specified in the notification. The Board shall on and from the date of such vesting, be deemed to have become the owner in relation to such undertaking and all the rights and liabilities of the State Government in relation to such undertaking shall, on and from the date of such vesting, be deemed to have become the rights and liabilities, respectively of the Board. Section 7 provides for payment of compensation that may be fixed by the Commission considering the value of the assets of the company after observing proper financial formalities. Section 8 provides for the gross amount payable to the company. Section 9 provides that the State Government if it is satisfied that the appellant has on or before the appointed day, disposed of any fixed asset whether by way of sale, exchange, gift, lease or otherwise than in the normal course of events, with a view to benefit the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Single Judge. The Division Bench by its impugned judgment has set aside the judgment of the learned Single Judge and held the Act and its provisions to be intra vires of the Constitution. Resultantly the writ appeals were accepted and writ petition filed by the appellants were ordered to be dismissed. Before adverting to the submissions made before us we would broadly refer to a few fundamental principles regarding the competence of the respective legislatures to enact laws and as to which law would prevail in case of inconsistency between the laws made by the Parliament and the laws made by the State Legislature. The principles are being referred to in the context of the controversy involved in the present appeals. India being a Union of States has Union Legislature (Parliament) and the State Legislatures for framing laws. Legislative fields in which the union or the State legislatures can frame laws are prescribed in the three lists contained in the Seventh Schedule to the Constitution of India Union List (List I); State List (List II); and Concurrent List (List III ). Source of power for enacting laws relating to the three lists is to be found in Articles 245 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the Legislature of a State is repugnant to any provision of law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament shall prevail and the law made by the Legislature of the State shall to the extent of the repugnancy be void. Clause (2) provides that where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provisions repugnant to the provisions of an earlier law made by the Parliament or an existing law with respect to the matters, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State. It is likely to happen from time to time that enactment though purporting to deal with a subject in one list touches also on a subject in another list and prima facie looks as if one legislature is impinging on the legislative field of the another Legislature. This may result in large number of statutes being decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is repugnant to the laws enacted by the Parliament the onus to showing its repugnancy and the extent to which it is repugnant would be on the party attacking its validity. There ought to be a presumption in favour of its validity and every effort should be made to reconcile them and construe both so as to avoid they being repugnant to each other. Repugnancy has to be there in fact and not based on a mere possibility. If the two enactments operate in different fields without encroaching upon each other then there would be no repugnancy. In Shyamakant Lal Vs. Rambhajan Singh Ors., AIR 1939 FC 74, the Court held: When the question is whether a provincial legislation is repugnant to an existing Indian Law, the onus of showing its repugnancy and the extent to which it is repugnant should be on the party attacking its validity. There ought to be a presumption in favour of its validity, and every effort should be made to reconcile them and construe both so as to avoid their being repugnant to each other; and care should be taken to see whether the two do not really operate in different fields without encroachment. Further repugnancy must exist in fact, and not depend merely on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Central legislation. Division Bench reversing the judgment of the learned Single Judge held that the Act passed by the Assam Legislature would fall under Entry 17 of List II and not under Entry 38 of List III and therefore would not be repugnant to the Central legislation. Another finding recorded by the Division Bench is that even if the Act is taken to be enacted under Entry 38 of List III, even, then there was no actual repugnancy as both the Acts did not operate in the same field. Since there was no repugnancy, it was not necessary to keep the Act for the assent of the President of India. Division Bench held the Act to be valid, intra vires and falling within the legislative competence of the State Legislature. Mr. V.R. Reddy learned senior counsel for the appellants contended that Electricity for the purpose of legislation is enumerated in Entry 38 of the concurrent list. That electricity in broad term includes generation of electricity from any source whether thermal, water, gas, wind or any other source . As far as generating company and licensee are concerned the Central Government has made specific provisions in the Act of 1910 and Act of 1948 for compulsory pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds. Learned counsel appearing for the appellants placing reliance on a Constitution Bench decision of this Court in Deepchand Vs. State of U.P., AIR 1959 SC 648, contended that even in the absence of direct conflict, the State law would be inoperative as the Central Acts of 1910 and 1948 intended to be exhaustive Codes in the field of electricity and the State Legislature did not have the legislative competence to enact law in the field occupied by the Central Legislation. Law made by the State Legislature in the occupied field could not come into operation unless it was reserved for the assent of the President of India and assented by him in terms of Article 254 (2). It was observed in para 29: Nicholas in his Australian Constitution, 2nd Edn. Page 303, refers to three tests of inconsistency or repugnancy: (1) There may be inconsistency in the actual terms of competing statutes; (2) Though there may be no direct conflict, a State Law may be inoperative because the Common Wealth Law, or the award of the Common Wealth Court, is intended to be a complete exhaustive Code; and (3) Even in the absence of intention, a conflict may arise when both State and Common Wealth seek ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate in the same field. Without entering into the controversy whether the State Act would fall under Entry 17 of List II or under Entry 38 of List III and assuming (but not holding that it falls under Entry 38 of List III) we examine as to whether there is any conflict between the provisions of the Central Act and the State Act. If there is no conflict at all the question of repugnancy would not arise. The State Act has been enacted to take over the Bharat Hydro Power Corporation in public interest as it could not complete the project within time so that the State could efficiently supervise manage and execute the work expeditiously to subserve the common good, in the context of the acute power shortage in the State. The State after taking over the project had the power to hand it over to the Board for completing the project. Provision has been made to pay adequate compensation which is to be determined by a Commission constituted under the Act for payment of adequate compensation. Contention raised on behalf of the appellants is that Central Act makes specific provisions for compulsory purchase of undertaking and a detailed procedure has been prescribed and the State Act has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaking under this section, 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 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. (5) If the State Government intends to exercise the option of purchasing the undertaking under this section, it 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 the undertaking. (6) 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 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- sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the learned counsel for the appellants that the State Act creates procedure parallel to the existing procedure provided under Section 6 of the Act of 1910 or for determing the purchase price as provided under Section 7A cannot be accepted because the provisions of Chapter II (Sections 3 to 11) are not applicable to the appellants as they are not licensees. Faced with this situation Mr.V.R. Reddy, learned senior counsel for the appellants, submitted that the appellants are deemed licensees under the provisions of Act of 1948. For this he has referred to Section 26A of the Act of 1948. Section 26A reads as: 26A. Applicability of the provisions of Act 9 of 1910 to Generating Company.- (1) Notwithstanding anything contained in sub- section (2), nothing in the Indian Electricity Act, 1910, shall be deemed to require a Generating Company to take out a licence under that Act, or to obtain sanction of the State Government for the purpose of carrying on any of its activities. (2) Subject to the provisions of this Act, Sections 12 to 19 (both inclusive) of the Indian Electricity Act, 1910 (9 of 1910) and clauses XIV to XVII (both inclusive) of the Schedule thereto, shall, as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsee means a person license under Part II of the Indian Electricity Act, 1910 (9 of 1910) to supply energy or a person who has obtained sanction under Section 28 of that Act to engage in the business of supplying energy but the provisions of Section 26, or 26A of this Act notwithstanding, does not include the Board or a Generating Company. A combined reading of Sections 2(4A) and 2(6) makes it clear that even if the appellant No. 1 is taken to be a generating company (which is not necessary to be determined in this case) it would not be a 'licensee' because the generating company has been specifically excluded from being a licensee notwithstanding the provisions of Sections 26 or 26A of the 1948 Act. As pointed out earlier only Sections 12 to 19 of the Act of 1910 have been made applicable to a generating company. Sections 3 to 11 of Act of 1910 do not apply to a generating company. Section 37 of Act of 1948 provides for purchase of generating stations or undertakings or main transmission lines by the Board. This Section would also not apply to the present case. The legislature in its wisdom made only certain provisions of Act of 1910 applicable to a generating comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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